Ap Economics Chapter 3 Flashcards

10719870309	Market	An institution or mechanism that brings together buyers and sellers of particular goods, services, or resources. An example of a market is a farmer's market. Related Terms: Supply and Demand	0
10719870310	Demand Schedule	A table that compares the price of a product and the quantity demanded. Related Terms: Supply Schedule, Demand Curve	1
10719870311	Law of Demand	All else equal, as price falls, the quantity demanded rises and as price rises, the quantity demanded falls. Example: If price of computers increase then people will buy less computers. Related Terms: Demand Schedule, Demand.	2
10719870312	Demand	Schedule or 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. Ex.) Demand shows how much of a product people will buy at various prices. Related Terms: Law of Demand, Demand Schedule	3
10719870313	Quantity Demanded	How much of a product that people are willing to buy. Related Terms: Demand, Demand Schedule	4
10719870314	Demand Curve	A curve that measures quantity demanded and price of a product. Related Terms: Demand, Law of Demand	5
10719870315	Diminishing marginal utility	As one person buys more units of a product, the utility gained per additional unit is diminished. Ex.)A person buys 3 hamburgers and each additional hamburger after the first gives him less satisfaction. Related Terms: Utility, Allocative Efficiency	6
10719870316	Income Effect	A product's lower price increases the buyer's purchasing power. Ex.)If Pepsi costs $2 then I can buy more of it than $3 cans of Coke. Related Terms: Demand, Supply	7
10719870317	Substitution Effect	People will buy the lowest priced alternative of a similar group of products. Ex.) If Pepsi costs less than Coke, then people will buy Pepsi Related Terms: Demand, Law of Demand	8
10719870318	Market Demand	How much an entire consumer population wants a product. Ex.) Adding up the demands of Bob, John, and Sally results in the market demand Related Terms: Demand, Demand Curve	9
10719870319	Determinants of Demand	Factors other than price that determines the demand for a product. Ex.) the consumer's personal taste Related Terms: Demand	10
10719870320	Inferior good	A good or service whose consumption declined as income rises, prices remain constant Ex.)Used Car, Instant Ramen	11
10719870321	Normal Goods	Products whose demand varies directly with money income. Ex.) Old cars, ramen noodles Related Terms: Demand	12
10719870322	Substitute Goods	Good that can be used in place of another. Ex.) Beef can be a substitute for chicken Related Terms: Demand	13
10719870323	Complementary goods	Good that is used together with another good. Ex.) Headphones complement smart phones Related Terms: Demand, Substitutes	14
10719870324	Change in Demand	A change in the quantity demanded of a good or service at every price shift of the demand curve	15
10719870325	Change in Supply	A change in specifically of a good that buyers are willing and able to buy	16
10719870326	Supply	A schedule showing the amounts of a good or service that sellers will offer at various prices during some period	17
10719870327	Supply Schedule	A method to show the different amounts of a certain products or them that company would need to supply	18
10719870328	Change in Quantity	A change specifically of a good that buyers are willing and able to buy	19
10719870329	Surplus	The amount by which the quantity supplied of a product exceeds that quantity demanded at a specific price	20
10719870330	Shortage	The amount by quantity demanded of a product exceeds the quantity supplied at the particular	21
10719870331	Equilibrium Price	The price in competitive market at which the quantity demanded and supplied are equal there is neither a shortage nor a surplus and there is no tendency for price to rise or fall	22
10719870332	Equilibrium Quantity	Quantity demanded and supplied at the equilibrium price in a competitive market	23
10719870333	Rationing Function of Prices	The ability of market forces in competitive market to equalize demanded and quantity supplied and to eliminate shortages and surpluses	24
10719870334	Price Floor	Legally determined price above the equilibrium	25
10719870335	Price Ceiling	Legally established maximum price for a good service	26
10719870336	Change in Quantity Supplied	A change in the specific quantity of a good that sellers are willing to sell	27
10719870337	Determinants Supply	Factors other then price that determines the quantities supplied of a good or service Ex. Change in Weather Change in # of Buyers	28
10719870338	Supply Curve	A curve that measures quantity supplied and price	29