Econ - 23:34:00 Chapter 3 Absolute(Money Price Ceteris...

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23/09/2007 23:34:00 Chapter 3 Absolute (Money) Price The price of a good in money terms. Ceteris Paribus A Latin term meaning “all other things constant” or “nothing else changes.” Complemen ts Two goods that are used jointly in consumption. If two goods are complements, the de for one rises as the price of the other falls (or the demand for one falls as the price of th other rises). Consumers’ Surplus (CS) The difference between the maximum price a buyer is willing and able to pay for a goo service and the price actually paid. CS = Maximum buying price – Price paid Demand The willingness and ability of buyers to purchase different quantities of a good at differ prices during a specific time period. Demand Curve The graphical representation of the law of demand. Demand Schedule The numerical tabulation of the quantity demanded of a good at different prices. A dem schedule is the numerical representation of the law of demand. Disequilibri um A state of either surplus or shortage in a market. Disequilibri um Price A price other than equilibrium price. A price at which quantity demanded does not equa quantity supplied. Equilibrium Equilibrium means “at rest.” Equilibrium in a market is the pricequantity combination fro which there is no tendency for buyers or sellers to move away. Graphically, equilibrium intersection point of the supply and demand curves. Equilibrium Price (Market- Clearing Price) The price at which quantity demanded of the good equals quantity supplied. Equilibrium Quantity The quantity that corresponds to equilibrium price. The quantity at which the amount o good that buyers are willing and able to buy equals the amount that sellers are willing a
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This note was uploaded on 05/04/2009 for the course ECO 31987 taught by Professor Welch during the Fall '07 term at SUNY Adirondack.

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Econ - 23:34:00 Chapter 3 Absolute(Money Price Ceteris...

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