Econ Unit 2 Vocab

A shift of the demand curve showing an increase or decrease in demand.

A measure of responsiveness of consumers and producers to changes in price or quantity.

Example: Autoworkers receive a 20% pay cut.

Curve that shows the various amounts of a product producers are willing to sell at each price.

The opposite of a monopoly, market with sufficient buyers and sellers so not one controls it.

Quantity demanded varies inversely with price, other things constant.

Quantity supplied varies directly with price, other things constant.

A minimum legal price which sellers may not sell below.

Economists assume human behavior reflects self interest and we pursue happiness/satisfaction. 

When quantity buyers are willing to buy equals quantity sellers are willing to sell.

Quantity which results when demand exceeds or in excess of supply at a given market price.

Maximum legal price a seller is permitted to charge.

How many units will be demanded at a particular price.

Factors that can shift the demand curve, including consumer taste/preference.

This occurs when demand and supply do not balance, it is indicated by a surplus or shortage.

Factors that can shift the supply curve, including change in cost of resources.

Example: The price of aluminum used to build cars increases.

This equals total revenue minus total costs.

The excess quantity which results when supply exceeds demand at a given price.

Movement from one point to another on the demand curve, reflecting a change in price.