Term
| Perfectly competitive market |
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Definition
| A market that meets the conditions of having many buyers and sellers, all firms selling identical products, and no barriers to entry. |
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Definition
The demand by all the consumers of a given good or service.
What the consumer is willing and able to buy. |
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| a table that shows the relationship between the price of a product and the quantity of the product demanded. |
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| the amount of a good or service that a consumer is willing and able to purchase at a given price |
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| curve that shows the relationship between price of a product and quantity demanded |
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| The amount of a good or service that a consumer is willing and able to purchase at a given price. |
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| A rule that states that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product will decrease. |
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| : The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes. |
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| The change in the quantity demanded of a good that results from the effect of a change in the good’s price on a consumers’ purchasing power. |
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Definition
| A change in something other than price that affects demand causes the entire demand curve to shift. |
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Definition
Income
Prices of related goods
Tastes
Population and demographics
Expected future prices |
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Definition
| Increase in income increases demand if product is normal. Increase in income decreases demand if product is inferior. |
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| Changes In the Price of Related Goods |
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Definition
| If consumers’ tastes change, they may buy more or less of the product. |
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| The characteristics of a population with respect to age, race, and gender. |
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Definition
| If price rises later a demand for a good will rise now. |
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Term
| Change in Quantity Demanded |
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Definition
| caused by a change in the items price movement along the Demand Curve. |
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Definition
caused by ANY OTHER CHANGE affecting the demand
Shift in the Demand Curve |
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| decisions of firms, individuals, or households about how much of a product or service to provide at various prices |
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| A table that shows the relationship between the price of a product and the quantity of the product supplied. |
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| A curve that shows the relationship between the price of a product and the quantity of the product supplied. |
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| The amount of a good or service that a firm is willing and able to supply at a given price. |
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Definition
| The rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied. |
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Definition
Prices of inputs
Technological change
Prices of related goods in production
Number of firms in the market
Expected future prices |
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Definition
| Inputs are things used in the production of a good or service. |
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Definition
| A firm may experience a positive or negative change in its ability to produce a given level of output with a given quantity of inputs. |
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| Prices of related Goods in Production |
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Definition
| Many firms can produce and sell alternative products. |
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Term
| Number of Firms & Expected Future Prices |
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Definition
| More firms in the market will result in more product available at a given price (greater supply). |
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Term
| Change in Quantity Supplied |
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Definition
caused by a change in THE ITEM’S PRICE
Movement along the Supply Curve |
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Definition
caused by ANY OTHER CHANGE affecting the supply
Shift in the Supply Curve |
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Definition
| situation in which quantity demanded equals quantity supplied. |
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Term
| Competitive market equilibrium |
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Definition
| market equilibrium in a market with many buyers and sellers |
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Definition
Income
Prices of related goods
Tastes
Population and demographics
Expected future prices |
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Definition
Prices of inputs
Technological change
Prices of related goods in production
Number of firms in the market
Expected future prices |
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Definition
| The ability to produce more of a good or service than competitors when using the same amount of resources. |
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Definition
| The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. |
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| The highest-valued alternative that must be given up to engage in an activity. |
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| Situation where a country does not trade with out countries. |
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| The process of concentrating on and becoming expert in a particular subject or skill |
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| The ratio at which a country can trade its exports for imports from other countries |
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| Losers of International Trade |
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Definition
| Firms that are not as efficient as foreign firms. |
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Definition
| Trade between countries that is without government restrictions. |
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Definition
| Taxes imposed by a government on imports. |
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Term
| Quotas and Voluntary Export Restraints |
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Definition
| Numerical limits imposed upon (quotas) or negotiated between (VERs) countries on the quantity of a good imported by one country from another. |
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| The process of countries becoming more open to foreign trade and investment. |
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| The use of trade barriers to shield domestic firms from foreign competition. |
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| Selling a product for a price below its cost of production. |
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