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27 Cards in this Set
- Front
- Back
market
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a place or service that enables buyers and sellers to exchange goods and services
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barter
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the direct exchange of goods and services without the use of money
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double coincidence of wants
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the situation that exists when A has what B wants and B has what A wants
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demand
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the amount of a product that people are willing and able to purchase at each possible price during a given period of time, everything else held constant
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quantity demanded
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the amount of a product that people are willing and able to purchase at a specific price
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law of demand
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the quantity of a well-defined good or service that people are willing and able to purchase during a particular period of time decreases as the price of that good or service rises and increases as the price falls, everything else held constant
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determinants of demand
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factors other than the price of the good that influence demand - income, tastes, prices of related goods and services, expectations, and number of buyers
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demand schedule
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a table or list of prices and the corresponding quantities demanded for a particular good or service
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demand curve
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a graph of a demand schedule that measures price on the vertical axis and quantity demanded on the horizontal axis
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normal goods
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goods for which demand increases as income increases
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inferior goods
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goods for which demand decreases as income increases
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substitute goods
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goods that can be used in place of each other; as the price of one rises, the demand for the other rises
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complementary goods
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goods that are used together; as the price of one rises, the demand for the other falls
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supply
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the amount of a good or service that producers are willing and able to offer for sale at each possible price during a period of time, everything else held constant
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quantity supplied
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the amount that sellers are willing and able to offer at a given price during a particular period of time, everything else held constant
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law of supply
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the quantity of a well-defined good or service that producers are willing and able to offer for sale during a particular period of time increases as the price of the good or service increases and decreases as the price decreases, everything else held constant
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determinants of supply
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factors other than the price of the good that influence supply - prices of resources, technology and productivity, expectations of producer, number of producers, and the prices of related goods and services
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supply schedule
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a table or list of prices and the corresponding quantities supplied of a particular good or service
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supply curve
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a graph of a supply schedule that measures price on the vertical axis and quantity supplied on the horizontal axis
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productivity
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the quantity of output produced per unit of resource
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equilibrium
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the price and quantity at which quantity demanded and quantity supplied are equal
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disequilibrium
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prices at which quantity demanded and quantity supplied are not equal at a particular price
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surplus
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a quantity supplied that is larger than the quantity demanded at a given price; it occurs whenever the price is greater than the equilibrium price
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shortage
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a quantity suppled that is smaller than the quantity demanded at a given price; it occurs whenever the price is less than the equilibrium price
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exchange rate
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the rate at which monies of different countries are exchanged
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price floor
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a situation in which the price is not allowed to decrease below a certain level
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price ceiling
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a situation in which the price is not allowed to rise above a certain level
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