microeconomics 2

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  • Created by: EmilySh02
  • Created on: 04-02-19 11:49
competitive market
a market in which the large number of buyers and sellers possess good market information and can easily enter or leave the market
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equilibrium price
the price at which planned demand for a good or service exactly equals planned supply
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supply
the quantity of a good or service that firms are willing and able to sell at given prices in a given period of time
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demand
the quantity of a good or service that consumers are willing and able to buy at given prices in a given period of time.
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effective demand
the desire for a good or service backed by an ability to pay
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market demand
the quantity of a good or service that all the consumers in a market are willing and able to buy at different prices
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condition of demand
a determinant of demand, other then the good's own price, that fixes the position of the demand curve
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increase in demand
a rightward shift of the demand curve
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decrease in demand
a leftward shift of the demand curve
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normal good
a good for which demand increases as income rises and demand decreases as income falls
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inferior good
a good for which demand decreases as income rises and demand increases as income falls
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elasticity
the proportionate responsiveness of a second variable to an initial change in the first variable
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price elasticity of demand
measures the extent to which the demand for a good changes in response to a change in the price of that good
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income elasticity of demand
measures the extent to which the demand for a good changes in response to a change in income
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cross-elasticity of demand
measures the extent to which the demand for a good changes in response to a change in price of another good
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market supply
the quantity of a good or service that all firms plan to sell at given prices in a given period of time
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profit
the difference between total sales revenue and total costs of productions
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total revenue
the money a firm receives from selling its output
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conditions of supply
determinants of supply, other then the good's own price, that fix the position of the supply curve
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increase in supply
a rightward shift of the supply curve
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decrease in supply
a leftward shift of the supply curve
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price elasticity of supply
measures the extent to which the supply of a good changes in response to a change in the price of that good
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equilibrium
a state of rest or balance between opposing forces
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disequilibrium
a situation in a market when there is excess supply or excess demand
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market equilibrium
a market is in equilibrium when planned demand equals planned supply and the demand curve crosses the supply curve
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market disequilibrium
exists at any other price other then the equilibrium price
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excess supply
when firms wish to sell more then consumers wish to buy with the price above the equilibrium price
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excess demand
when consumers wish to buy more then firms wish to sell with the price below the equilibrium price
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joint supply
when one good is produced, another good is also produced from the same raw materials
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competing supply
when raw materials are used to produce one good they cannot be used to produce another good.
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complementary goods
a good in joint demand, or a good which is demanded at the same time as the other good
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substitute good
a good in competing demand, namely a good which can be used in place of the other good
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composite demand
demand for a good which has more than one use
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derived demand
demand for a good which is an input into the production of another good
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allocative efficiency
occurs when the available economic resources are used to produce the combination of goods and services that best matches people's tastes and preferences
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productive efficiency
for the economy as a whole occurs when it is impossible to produce more of one good without producing less of another
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merit good
a good in which when consumed leads to benefits which other people enjoy, or a good for which the long-term benefit of consumption exceeds the short-term benefit enjoyed by the person consuming the merit good.
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Other cards in this set

Card 2

Front

the price at which planned demand for a good or service exactly equals planned supply

Back

equilibrium price

Card 3

Front

the quantity of a good or service that firms are willing and able to sell at given prices in a given period of time

Back

Preview of the back of card 3

Card 4

Front

the quantity of a good or service that consumers are willing and able to buy at given prices in a given period of time.

Back

Preview of the back of card 4

Card 5

Front

the desire for a good or service backed by an ability to pay

Back

Preview of the back of card 5
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