Microeconomics Chapter 4 (Pearson Series in Economics)

A group of economic agents who are trading a good or service plus the rules and arrangements for trading. (59)

If all sellers and all buyers face the same price

[1] Sellers all sell an identical good or service, and [2] any individual buyer or any individual seller isn't powerful enough on his own to affect the market price of that good or service. (60)

A buyer or seller who accepts the market price--buyers can't bargain for a lower price, and sellers can't bargain for a higher price. (60)

The amount of a good that buyers are willing to purchase at a given price. (61)

A table that reports the quantity demanded at different prices, holding all else equal. The table version of a demand curve. (61)

Implies that everything else in the economy is held constant. (61)

Plots the quantity demanded at different prices. A demand curve plots the demand schedule. (62)

-The two variables move in opposite direction
-Downward sloping curve
-(62)

In almost all cases, the quantity demanded rises when the price falls (holding all else equal). (62)

The highest price that a buyer is willing to pay for an extra unit of a good. (63)

As you consume more of a good, your willingness to pay for an additional unit declines. (63)

The process of adding together individual behaviors. Taking the sum of individual demand curves. (63)

The sum of the individual demand curves of all potential buyers. It plots the relationship between the total quantity demanded and the market price, holding all else equal. (64)

Only when the quantity demanded changes at a given price. (65)

If a good's own price changes and it's demand curve hasn't shifted, the own price change produces a movement along the demand curve. (65)

An increase in income shifts the demand curve to the right (holding the good's price fixed), causing buyers to purchase more of the good. (66).

An increase in income shifts the demand curve to the left, causing buyers to purchase less of the good. (ex. spam) (66)

When a rise in the price of one good leads to a rightward shift in the demand curve for the other. (66).

When a fall in the price of one leads to a rightward shift in the demand curve for the other. (67)

A table that reports the quantity supplied at different prices, holding all else equal. (69)

Plots the quantity supplied at different prices. A supply curve plots the supply schedule. (69)

Variables having a tendency to move in the same direction. (69)

In almost all cases, the quantity supplied rises when the price rises. (69)

The lowest price that a seller is willing to get paid to sell an extra unit of a good. At a particular quantity supplied, willingness to accept is the height of the supply curve. Willingness to accept is the same as the marginal cost of production. (70)

The sum of the individual supply curves of all the potential sellers. It plots the relationship between the total quantity supplied and the market price, holding all else equal. (70)

A good or service used to produce another good or service. (72)

Only when the quantity supplied changes at a given price (72)

If a good's own price changes and its supply curve hasn't shifted (72)

The crossing point of the supply curve and the demand curve. (73)

Equates quantity supplied and quantity demanded. (73)

The quantity that corresponds to the competitive equilibrium price. (73)

When the market price is above the competitive equilibrium prices, quantity supplied exceeds quantity demanded. (74)

When the market prices is below the competitive price, quantity demanded exceeds quantity supplied (75)