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Mankiw Chapter 4
Supply and Demand
18
Economics
11th Grade
09/14/2008

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Term
Market
Definition
A group of buyers and sellers of a particular good or service.
Term
Competitive market
Definition
A market in which there are many buyers and sellers so that each has a negligible impact on the market pile.
Term
Demand Curve
Definition
The relationship between price and quantity demanded.
Term
Quantity demanded
Definition
The amount of a good that buyers are willing and able to purchase
Term
Law of Demand
Definition
the claim that, other things equal, the quantity demanded of a good falss when the price of a good rises.
Term
Demand schedule
Definition
A table that shows the relationship between the price of a good and the quantity demanded.
Term
Shifts in Demand Curve
Definition
1. Income
2. Price of Related Goods(substitutes and compliments)
3. Tastes
4. Future expectations
5. Number of Buyers
Term
Quantity supplied
Definition
the amount of a good that sellers are willing and able to sell.
Term
Law of supply
Definition
the claim that, other things equal, the quantity supplied of a good rises when the price of a good rises.
Term
supply schedule
Definition
a table that shows the relationship between the price of a good and the quantity supplied
Term
Supply Curve
Definition
A graph of the relationship between the price of a good and the quantity supplied.
Term
Shifts in the Supply Curve
Definition
1. Input prices
2. Technology
3. Expectations
4. Number of sellers.
Term
Equilibrium
Definition
a situation in which market price has reached the level at which quantity supplied equals quantity demanded
Term
Equilibrium price
Definition
the price that balances quantity supplied and quantity demanded
Term
Equilibrium quantity
Definition
the quantity supplied and the quantity demanded at the equilibrium price
Term
surplus
Definition
when quanitity supplied > quantity demanded
Term
shortage
Definition
when quantity demanded is > than quantity supplied
Term
law of supply and demand
Definition
the claim that the price of any good adjusts to bring the quantity supplied and demanded for that good into balance
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