MicroEconomics Chapter 3 Roger A. Arnold 10th edition

The graphical representation of the law of supply.

Two goods that are used jointly in consumption. If two goods are complements, the demand for one rises as the price of the other falls (or the demand for one falls as the price of the other rises).

The difference between the maximum price a buyer is willing and able to pay for a good or service and the price actually paid. CS = Maximum buying price − Price paid

The willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period.

The graphical representation of the law of demand.

The numerical tabulation of the quantity demanded of a good at different prices. A demand schedule is the numerical representation of the law of demand.

A state of either surplus or shortage in a market.

A price other than equilibrium price. A price at which the quantity demanded does not equal the quantity supplied.

Equilibrium means "at rest." Equilibrium in a market is the price-quantity combination from which buyers or sellers do not tend to move away. Graphically, equilibrium is the intersection point of the supply and demand curves.

The price at which the quantity demanded of the good equals the quantity supplied.

The quantity that corresponds to equilibrium price. The quantity at which the amount of the good that buyers are willing and able to buy equals the amount that sellers are willing and able to sell, and both equal the amount actually bought and sold.

A good for which demand falls (rises) as income rises (falls).

As the price of a good rises, the quantity demanded of the good falls, and as the price of a good falls, the quantity demanded of the good rises, ceteris paribus.

For a given time period, the marginal (or additional) utility or satisfaction gained by consuming equal successive units of a good will decline as the amount consumed increases.

As the price of a good rises, the quantity supplied of the good rises, and as the price of a good falls, the quantity supplied of the good falls, ceteris paribus.

Any place people come together to trade.

A good for which demand does not change as income rises or falls.

A good for which demand rises (falls) as income rises (falls).

The price of a good. For example, if the price of oranges is $1, this is its own price.

The difference between the price sellers receive for a good and the minimum or lowest price for which they would have sold the good. PS = Price received − Minimum selling price

A condition in which the quantity demanded is greater than the quantity supplied. Shortages occur only at prices below equilibrium price.

A monetary payment by government to a producer of a good or service.

Two goods that satisfy similar needs or desires. If two goods are substitutes, the demand for one rises as the price of the other rises (or the demand for one falls as the price of the other falls).

The willingness and ability of sellers to produce and offer to sell different quantities of a good at different prices during a specific time period.

A condition in which the quantity supplied is greater than the quantity demanded. Surpluses occur only at prices above equilibrium price.

The sum of consumers' surplus and producers' surplus. TS = CS + PS

The numerical tabulation of the quantity supplied of a good at different prices. A supply schedule is the numerical representation of the law of supply.