ECN 212 2
Terms
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- Market
- a place or service that enables buyers and sellers to exchange goods and services
- Barter
- the direct exchange of goods and services without the use of money
- Double Coincidence of Wants
- the situation that exists when A has what B wants and B has what A wants
- Transaction Costs
- the costs involved in making an exchange
- Relative Price
- the price of one good expressed in terms of the price of another good
- Determinant of Demand
- Factors other than the price of the good that influence demand: INCOME, TASTES, PRICES OF RELATED GOODS AND SERVICES, EXPECTATIONS, and NUMBER of BUYERS
- Demand Schedule
- a table or list of the prices and the corresponding quantities demanded of a particular good or service
- Demand Curve
- a graph of a demand schedule that measures price on the vertical axis and quantity demanded on the horizantal axis
- Normal Good
- goods for which demand increases as income increases
- Inferior goods
- goods for which demand decreases as income increases
- Substitue goods
- goods that can be used in place of each other; as the price of one rises, the demand for the other rises
- Complementary Goods
- goods that are used together; as the price of one rises, the demand for the other falls
- Supply
- the amount of a good or service that producers are willing and able to offer for sale at each possible price during a period of time, everything else held constant
- Quantity supplied
- the amount sellers are willing and able to offer at a given price during a particular period of time, everything else held constant
- Law of Supply
- the quantity of a well-difined good or serice that producers ar e willing and able to offer for sale during a particular period of time increases as the price of the good or service increases and decreases as the price decreases, everything else held constant
- Determinants of Supply
- factors other than the price of the good that influence supply- PRICES OF RESOURCES, TECHNOLOGY AND PRODUCTIVITY, EXPECTATIONS OF PRODUCERS, NMBER OF PRODUCERS, and the PRICES OF RELATED GOODS AND SERVICES.
- Supply Schedule
- a table or list of prices and corresponding qunatities supplied of a particular good or service
- Supply Curve
- a graph of a supply scedule tha tmeasures price on the vertical axis and quantity supplied on the horizontal axis
- Productivity
- the quantity of output produced per unit of resource
- Equilibrium
- the price and quantity at which quantity demanded and quantity supplieed are equal
- Disequilibrium
- a point at which quantity demanded and quantity supplied ar enot equal at a particular price
- Surplus
- a quantity supplied that is larger than the quantity demanded at a giben price; it occurs whenever the price is greater than the equilibrium price
- Shortage
- a quantity supplied that is smaller than the quantity demanded at a given price; it occurs whenever the price is less than the equilibrium price
- Exchange rate
- the rate at which monies of different countries are exchanged
- Price Floor
- a situation in which the price is not allowed to decrease below a certain level
- Price Ceiling
- a situation in which the price is not allowed to rise above a certain level