Abeka Economics: Chapter 4 Review – Flashcards
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The price at which goods can be sold in an open market with many potential sellers and buyers.
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market price
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The amount of satisfaction that results from a one-unit increase of a product.
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marginal utility
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The total amount of satisfaction received from possessing a particular amount of a good.
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total utility
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When the price of a good increases the demand decreases, and when the price drops the demand increases.
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law of demand
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When the price of a good increases the quantity supplied increases, and when the price drops the quantity supplied decreases.
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law of supply
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A list of numbers that compares price with quantity demanded.
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demand schedule
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A list of numbers that compares price with quantity.
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supply schedule
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A graph of the quantity of goods purchases as different prices within a time range; slopes down and right.
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demand curve
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A graph of the quantity of goods supplied at different prices within a time range; slopes up and right.
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supply curve
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A god whose demand is directly related to consumers' incomes.
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normal good
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A good whose demand decreases as consumers' incomes increase.
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inferior good
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A good capable of being used in place of another good.
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substitute good
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A good often used in conjunction with another.
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complementary good
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Money given by government to a business to encourage production.
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subsidy
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The point at which quantity demanded and quantity supplied are equal.
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equilibrium
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Quantity demanded exceeds quantity supplied.
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shortage
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Quantity supplied exceeds quantity demanded.
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surplus
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A limit that government places on how high producers may set prices; price is below equilibrium price.
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price ceiling
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A limit that government places on how low a producer may set prices; price is above the equilibrium price.
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price floor
