Chapter 3 Terms 101 - attempt to make a profit. Market –...

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Consumer – an individual or household that purchases the goods and services produced by an economic system. Normal Goods – Goods you purchase more of as your income rises. Inferior Goods – Goods that you purchase less of as your income rises and more of as your income declines. The Law of Demand – When the price of a good goes up, people buy less of it. When the price of a good goes down, People buy more of it. Demand Schedule - It shows a numerical representation of the inverse relationship between specific prices and quantities demanded of a good measured in terms of constant quantity units in a given time period. (what you can buy with your paycheck) The Law of Supply – At higher prices, a larger quantity will be supplies. At lower prices a smaller quantity will be supplies. Supply Schedule - A table that shows the direct relationship between price and quantity supplied at each price in a given time period. (Catalog, menu, pricelist, flyer, etc.) Firm – an organization that produces a good or service for sale in an
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Unformatted text preview: attempt to make a profit. Market – a group of firms and individuals that are in touch with each other in order to buy or sell some good or service. Market Demand Curve – a curve, usually sloping downward to the right, showing the relationship between a products price and the quantity demanded of the product. Market Supply Curve – a curve, usually sloping upward to the right, showing the relationship between a product’s price and the quantity supplied of the product. Equilibrium – a situation in which there is no tendency for change. Equilibrium Price – a price that shows no tendency for change, because it is the price at which the quantity demanded equals the quantity supplied, the price toward which the actual price of a good always tends to move. (The market clearing price) Equilibrium Quantity – The quantity demanded at the equilibrium price. Public Sector – the government sector of the economy. 3A...
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This note was uploaded on 06/06/2011 for the course ECON 101 taught by Professor Dsliva during the Fall '11 term at Moraine Valley Community College.

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Chapter 3 Terms 101 - attempt to make a profit. Market –...

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