Term
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Definition
| relationship between the quantity of a good that producers are willing to sell and the price of the good |
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Term
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Definition
| relationship between the quantity of a good that buyers are willing to purchase and the price of the good. |
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Term
| Change in Supply/Change in demand |
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Definition
| refers to shifts in the curve |
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Term
| Change in quantity supplied/Change in quantity demanded |
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Definition
| refers to movements along the curve |
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Term
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Definition
| two goods for which an increase in the price of one leads to an increase in the quantity demanded of the other |
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Term
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Definition
| Two goods for which an increase in the price of one leads to a decrease in the quantity demanded of another |
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Term
| Market Equilibrium/Market clearing |
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Definition
| QS=QD, where the supply/demand curves intersect, results in market price. has a corresponding quantity sold. |
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Term
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Definition
| tendency in a free market for price to change until the market clears (QS=QD) |
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Term
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Definition
| QS>QD, above the market price and below the demand curve |
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Term
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Definition
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Term
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Definition
| percentage change in one variable resulting from a 1% increase in another. |
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Term
| Price elasticity of demand |
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Definition
| Percentage change in quantity demanded of a good resulting from a 1% increase in it's price. |
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Term
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Definition
| demand curve that is a straight line |
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Term
| Infinitely elastic demand |
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Definition
| consumers will buy as much of a good as they can get at a single price but for any higher price the quantity demanded drops to zero, while for any lower price the QD increases without limit. |
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Term
| Completely inelastic demand |
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Definition
| consumers will buy a fixed quantity of a good regardless of it's price |
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Term
| Income elasticity of demand |
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Definition
| percentage change in the QD resulting from a 1% increase in income. |
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Term
| Cross-price elasticity of demand |
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Definition
| percentage change in teh QD of one good resulting from a 1% increase in the price of another. |
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Term
| Price elasticity of supply |
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Definition
| percentage change in quantity supplied resulting from a 1% increase in price. |
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Term
| Point elasticity of demand |
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Definition
| price elasticity at a particular point on the demand curve. |
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Term
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Definition
| pice elasticity calculated over a range of prices. |
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Term
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Definition
| industires in which sales tend to magnify cyclical cahnges in GDP and national income. |
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Term
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Definition
| government mandates a higher price than the market price. Results in QS>QD or surplus. ie. agricultural price supports |
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Term
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Definition
| government mandates a price lower than market price. QD>QS, shortages occur. ie. rent controls |
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Term
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Definition
| those one buys more of when one's income rises |
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