3.7: Key Terms
- Page ID
- 181305
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)- ceteris paribus
- other things being equal
- complements
- goods that are often used together so that consumption of one good tends to enhance consumption of the other
- consumer surplus
- the extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid
- deadweight loss
- the loss in social surplus that occurs when a market produces an inefficient quantity
- demand
- the relationship between price and the quantity demanded of a certain good or service
- demand curve
- a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis
- demand schedule
- a table that shows a range of prices for a certain good or service and the quantity demanded at each price
- economic surplus
- see social surplus
- equilibrium
- the situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change
- equilibrium price
- the price where quantity demanded is equal to quantity supplied
- equilibrium quantity
- the quantity at which quantity demanded and quantity supplied are equal for a certain price level
- excess demand
- at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage
- excess supply
- at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus
- factors of production
- the resources such as labor, materials, and machinery that are used to produce goods and services; also called inputs
- inferior good
- a good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls
- inputs
- the resources such as labor, materials, and machinery that are used to produce goods and services; also called factors of production
- law of demand
- the common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant
- law of supply
- the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant
- normal good
- a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls
- price
- what a buyer pays for a unit of the specific good or service
- price ceiling
- a legal maximum price
- price control
- government laws to regulate prices instead of letting market forces determine prices
- price floor
- a legal minimum price
- producer surplus
- the extra benefit producers receive from selling a good or service, measured by the price the producer actually received minus the price the producer would have been willing to accept
- quantity demanded
- the total number of units of a good or service consumers are willing to purchase at a given price
- quantity supplied
- the total number of units of a good or service producers are willing to sell at a given price
- shift in demand
- when a change in some economic factor (other than price) causes a different quantity to be demanded at every price
- shift in supply
- when a change in some economic factor (other than price) causes a different quantity to be supplied at every price
- shortage
- at the existing price, the quantity demanded exceeds the quantity supplied; also called excess demand
- social surplus
- the sum of consumer surplus and producer surplus
- substitute
- a good that can replace another to some extent, so that greater consumption of one good can mean less of the other
- supply
- the relationship between price and the quantity supplied of a certain good or service
- supply curve
- a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis
- supply schedule
- a table that shows a range of prices for a good or service and the quantity supplied at each price
- surplus
- at the existing price, quantity supplied exceeds the quantity demanded; also called excess supply
- total surplus
- see social surplus