ECON 330 CH 3

Demand schedule
A table showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at a variety of prices
Quantity demanded
The amount of a good that buyers are willing and able to purchase at a given price
Demand curve
A graph showing the relationship between the price of a good and the amount that buyers are willing and able to purchase at a variety of prices
Law of demand
The claim that, with other things being equal, the quantity demanded of a good falls when the price of that good rises
supply curve
If Sunita’s boss is interested in a graphical representation of the relationship between the price and quantity of televisions supplied, you should advise Sunita to construct a __________ using the data provided.
supply schedule
If Sunita’s boss is more interested in the detailed data used to construct this visual representation, you should instead advise Sunita that a ______ would be more appropriate
Producer surplus
I sold a watch for $100, even though I was willing to go as low as $80 to sell it.
Consumer surplus
Even though I was willing to pay up to $35 for a pair of blue jeans, I bought a pair of blue jeans for only $28.
Law of demand
The principle that there is an inverse relationship between the price of a good and the quantity buyers are willing to purchase in a defined time period, ceteris paribus.
change in quantity demand
A movement between points along a stationary demand curve, ceteris paribus.
Normal goods
Any good there is a direct relationship between changes in income and its demand curve
Inferior goods
Any good for which there is an inverse relationship between changes in income and its demand curve
Substitute goods
A good that competes with another good for consumer purchases. As a result, there is a direct relationship between a price change for one good and the demand for its “competitor” good.
Complementary goods
A good that is jointly consumed with another good. As a result, there is an inverse relationship between a price change for one good and the demand for its “go together” good.
Law of supply
the principle that there is a direct relationship between the price of a good and the quantity sellers are willing to offer for sale in a defined time period, ceteris paribus.
Change in quantity demanded
is a movement along a stationary demand curve caused by a change in price. When any of the nonprice determinants of demand change, the demand curve responds by shifting.
price system
A mechanism that uses the forces of supply and demand to create an equilibrium through rising and falling prices.
Shortage
A market condition existing at any price where the quantity supplied is less than the quantity demanded.
Equilibrium
A market condition that occurs at any price and quantity at which the quantity demanded and the quantity supplied are equal.
Change in quantity supplied
A movement between points along a stationary supply curve, ceteris paribus
Surplus
A market condition existing at any price where the quantity supplied is greater than the quantity demanded.