Dubbs Microeconomics – Supply and Demand Vocabulary

A graphical representation of the demand schedule, showing the relationship between quantity demanded and price.

Economic model of price determination in a market

A schedule showing the amounts of a good or service that buyers (or a buyer) wish to purchase at various prices during some time period

The amount of a good or service that buyers (or a buyer) desire to purchase at a particular price during some period

The principle that, other things equal, an increase in a product's price will reduce the quantity of its demand, and conversely for a decrease in price

A change in the demand curve, left or right, that occurs when there is a change in taste/preferences, number of consumers, price of related goods, income, and future expectations.

A movement that occurs when consumers change the amount of a good or service they desire, associated with a change in price.

The change in demand it the change that causes the demand curve to shift left of right. This occurs when consumers demand more or less of a product. The change in quantity demanded occurs along the demand curve and occurs when the consumers change how much of a certain product they want to purchase.

Products or services that can be used in place of each other. When the price of one falls, the demand for the other product falls; conversely, when the price of one product rises, the demand for the other product rises

Products and services that are used together. When the price of one falls, the demand for the other increases (and conversely).

A good or service whose consumption increases when income increases and falls when income decreases, price remaining constant.

A good or service whose consumption declines as income rises (and conversely), price remaining constant.

The curve illustrating the demand of an individual buyer.

The principle that as a consumer increases the consumption of a good or service, the marginal utility obtained from each additional unit of the good or service decreases.

The satisfaction or pleasure a consumer obtains from the consumption of a good or service, or a collection of goods and services

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product's price

A change in the quantity demanded of a consumer good that results in its relative expensiveness caused by a change in the product's price

The amount of a product that producers are willing and able to produce and sell at a particular price at a particular time

As price of a good increases, the quantity supplied of the good rises, and as the price of a good decreases, the quantity supplied of the good falls.

The quantity produced at all prices during a specific time period

A table that shows amounts of a product a producer is willing and able to produce and sell at each specific price in a series of possible prices during a specified time period

The graphical representation of the relationship between the quantity supplied of a good and the price of a good that is upward sloping

The total supply of every seller willing and able to sell a good.

Goods that can be used to replace others

One of two goods that are produced jointly using the same resource

A measure of average output per unit of input

When the price of one falls, the demand for the other product falls so the supply would fall also.

When the price of one falls, the demand of the other rises so the supply would rise also.

A change in supply caused by the determinants of supply

A change in quantity supplied as a result of a change in price and results in a change from one point to another along the curve

A situation in which the supply of an item is exactly equal to its demand. Since there is neither surplus nor shortage in the market, price tends to remain stable in this situation.

The price at which the quantity of a product offered is equal to the quantity of the product in demand.

The quantity that exists when a market is in equilibrium

A situation in which the quantity of a good or service supplied is more than the quantity demanded, and the price is above the equilibrium level

Disequilibrium condition in a competitive market in which the quantity demanded is greater than the quantity supplied

A form of financial or in kind support extended to an economic sector generally with the aim of promoting beneficial economic and social outcomes

The extra benefit received from a small increase in the consumption of a good or service. It is calculated as the increase in total benefit divided by the increase in consumption

The change in the total cost that arises when the quantity produced changes by one unit

The body of law which prohibits employers from hiring employees or workers for less than a given hourly, daily or monthly minimum wage

The degree to which stock prices reflect all available, relevant information

The market in which goods or services are traded illegally

The maximum price sellers are allowed to charge for a good or service; a form of price control.

The minimum price buyers are required to pay for a good or service; a form of price control.

An upper limit, set by the government, on the quantity of some good that can be bought or sold; also referred to as quantity control.

Refers to the setting of government price controls to the maximum price for the renting of residential housing

A state of the economy in which production is in accordance with consumer preferences

A term often used to refer both to individual consumer surplus and to total consumer surplus

A measure of the effect of the change in the price of one good on the quantity demanded of the other; it is equal to the percent change in the quantity demanded of one good divided by the percent change in the price of another good

The loss in total surplus that occurs whenever an action or a policy reduces the quantity transacted below the efficient market equilibrium quantity

Consumer income, prices of substitute and complementary goods, consumer tastes and preferences, consumer speculation, and number of buyers in the market all influence demand

Anything other than price of the current item that influences production decisions, including cost of raw materials, cost of labor, level of technology used to produce, number of producers in the market, price of related products, and expected future price.

When the price elasticity of demand is greater than 1

The percent change in the quantity of a good demanded when a consumer's income changes divided by the percent change in the consumer's income

When the price elasticity of demand is less than 1

The time period in which all inputs can be varied

A technique for calculating the percent change in which changes in a variable are compared with the average, or midpoint, of the starting and final values

The case in which any price increase will cause the quantity demanded to drop to zero; the demand curve is a horizontal line

The case in which the quantity demanded does not respond at all to changes in the price, the demand curve is a vertical line

Legal restriction on how high or low a market price may go

The ratio of the percent change in the quantity demanded to the percent change in the price as we move along the demand curve

A measure of the responsiveness of the quantity of a good supplied to the price of the good; the ratio of the percent change in the quantity supplied to the percent change in the price as we move along the supply curve

A term often used to refer to either individual producer surplus or total producer surplus

An upper limit, set by the government, on the quantity of some good that can be bought or sold; also referred to as a quantity control

The time period in which at least one input is fixed

The insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price

The total value of sales of a good or service

Price of good multiplied by quantity sold

The excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; surplus occur when the price is above the equilibrium price

The case in which the price elasticity of demand is exactly 1

a measure that is to be maximized in any situation involving choice

The collection of all the goods and services consumed by that individual.

a function that measures the level of satisfaction a consumer receives from any basket of goods and services

a measure that is to be maximized in any situation involving choice

the amount that utility increases with an increase of one unit of an economic good or service

the limited amount of income available to consumers to spend on goods and services