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3.7: Key Terms

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    215591
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    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

    This page titled 3.7: Key Terms is shared under a CC BY 4.0 license and was authored, remixed, and/or curated by OpenStax.

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