key definitions - Econ 002 Wissink and Kyle January 30...

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Ec o n 002 W i ss i nk and K y le J an uar y 30 Perfectly competitive market a market with a very large number of firms, each of which produces the same standardized product and is sosmall that it does not affect the market price ofthe good it produces ~ ( Demand schedule: a table of numbers that shows the relationship between price and quantity demanded by a consumer, ceteris paribus (everything else held fixed). Individua emand curve: a curve that shows . the relationship between price and quantity demanded by a consumer, ceteris paribus (everything else held fixed). . Law of demand: , thelower the price, the larger the quantity demanded. ' ," . ~ " Change in quantity de~ded: a change in the amount of a good demanded resulting from a change in the price of the good; represented grap~cally by a movement along the demand curve. Substitution Effect: the change in consumption resulting from a change in the price of one good relative to the price of other goods. Income Effect: ' the change in consumption resulting from an increase inthe consumer's real income. MarKet demand curve: a curve snowing the relationship between price and the quantity demanded by all together, ceteris paribus (everything else held fixe~). Supply schedule: a table of numbers that shows the relationship between price and qu~tity supplied, ceteris paribus (everything else held fixed). ; . Individual supply curve: a curve that shows the relationship between price and quantity supplied by a producer, ceteris paribus (everything else held fixed). ' Law ofsupply: thehigher the price, thelarger the quantity · supplied. Change in quantity supplied : ~ change in the quantity supplied resulting from a change in the price of the good; represented graphically by a movement along the supply curve. Market supply curve: a curve showing the relationship between price and the 3uantity supplied by all producers together, ceteris paribus (everything else held fixed).
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