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28 Cards in this Set
- Front
- Back
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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 Bhas what A wants
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transaction costs
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the costs involved in making an exchange
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relative price
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the price of one good expressed in terms o the price of another good
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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 well-defined good or service that people are willing and able to purchase durning a particular period of time.
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Determinats 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, # of buyers
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demand shedule
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a table or list of the prices and the corresponding quantities demanded of 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 incteases as income increases
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inferior goods
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goods for which demand decteases 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 or one rises, the demand for the other falls
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Supply
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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 held const.
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quantity supplied
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the amount 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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quantity of well-defined good or service that producers are willing and able to offer for sale during a particular period of time
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determinants of supply
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factors other than the price of the good that influence supply: price of resources, technology production, expectations of producers, # of producers, price of related goods and services
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supply schedule
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table or list of prices and corresponding quantities supplied of a particular good or service
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supply curve
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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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a point 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 supplied 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 decease below a certain level
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price ceiling
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a situation in which the price is not allowed ot rise above a certain level
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