AP Economics, Chapter 3 Flashcards

470987344	market	an institution or mechanism that brings together buyers (demanders) and sellers (suppliers) of particular goods . all situations that link potential buys with potential sellers are this.
470987345	demand	schedule or a curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time
470987346	law of demand	all else equal, as price falls, the quantity demanded rises, and as price rises, the quantity demanded falls
470987347	diminishing marginal utility	in any specific time period, each buyer of a product will derive less satisfaction from each successive unit of the product consumed.
470987348	income effect	a lower price increases the purchasing power of a buyer's income, enabling the buyer to purchase more of the product that he or he could by before.
470987349	substitution effect	at a lower price, buyers have the incentive to substitute what is now a less expensive product for similar products that are now relatively more expensive.
470987350	determinants of demand	consumers' tastes, the number of consumers in the market, consumers' incomes, the prices of related goods, and consumer expectations about future prices and incomes
470987351	normal goods	products whose demand varies directly with money income; superior goods
470987352	inferior goods	goods whose demand varies inversely with money income
470987353	substitute goods	one that can be used in place of another good; the price of one and the demand for the other move in the same direction
470987354	complementary goods	one that is used together with another good. ie: peanut butter and jelly; when two products are complements; the price of one good and the demand for the good movie in opposite directions
470987355	change in demand	a shift of the demand curve to the right or to the left
470987356	change in quantity demanded	movement from one point to another- from one price-quantity combination to another-on a fixed demand schedule or demand curve
470987357	supply	schedule or curve showing the amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period
470987358	law of supply	as price rises, the quantity supplied rises; as price falls, the quantity supplied falls
470987359	determinants of supply	resource prices, technology, taxes and subsidies, prices of other goods, price expectations, the number of sellers in the market
470987360	change in supply	an increase in supply shifts the curve to the right; a decrease in supply shifts it to the left. the cause of a change in supply is a change in one more of the determinants of supply
470987361	change in quantity supplied	movement from one point to another on a fixed supply curve
470987362	surplus	excess supply
470987363	shortage	excess demand
470987364	equilibrium price	market-clearing; no shortage or surplus
470987365	rationing function of prices	the ability of the competitive forces of supply and demand to establish a price at which selling and buying decisions
470987366	demand	a schedule that shows the various amounts of a product consumers are willing and able to purchase at each price in a series of possible prices during a specified period of time
470987367	diminishing marginal utility	the reason for the law of demand can best be explained in terms of..
470987368	a decrease in the number of buyers	which change will decrease the demand for a product?
470987369	increase the demand for the other	if two goods are substitutes for each other, an increase in the price of one will necessarily
470987370	quantity supplied increases	the law of supply states that, other things being constant, as price increases...