Principles of Microeconomics Chapter 3 Key Terms

The requirement that when analyzing the relationship between 2 variables, such as price and quantity demanded, other variables must be held constant.

A market equilibrium with many buyers and sellers.

Goods and services that are used together.

A curve that shows the relationship between the price of a product and the quantity of that product demanded.

A table that shows the relationship between the price of a product and the quantity of the product demanded.

The characteristics of a population with respect to age, race and gender.

The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power, holding all other factors constant.

A good for which the demand increases as income falls and decreases as income rises.

The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product will decrease.

The rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in the price causes decreases in the quantity supplied.

The demand by all the consumers of a given good or service.

A situation in which quantity demanded equals quantity supplied.

A good for which the demand increases as income rises and decreases as income falls.

A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.

The amount of a good or service that a consumer is willing and able to purchase at a given price.

The amount of a good or service that a firm is willing and able to supply at a given price.

A situation in which the quantity demanded is greater than the quantity supplied.

Goods and services that can be used for the same purpose.

The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes.

A curve that shows the relationship between the price of a produce and the quantity of the product supplied.

A table that shows the relationship between the price of a product and the quantity of the product supplied.

A situation in which the quantity supplied is greater than the quantity demanded.

A change in the ability of a firm to produce a given level of output with a given quantity of inputs.