201-MidtermReview-1(1).docx

Consumer goods goods or services that will be used

This preview shows page 1 - 3 out of 3 pages.

Consumer goods - goods or services that will be used immediately by the person who buys them Capital goods - goods (equipment) that will be used to make something else Capitalization - the process of building the supply of capital used in production Demand Side of Market - buyers in either the product or factor market Supply Side of Market - sellers in either the product or factor market Law of Demand - prices are negatively related to quantities for consumers Law of Supply - prices are posively related to quantities for producers Equilibrium - buyers and sellers reach agreement about the price of the product or service and how much of it will be exchanged Substitutes - the consumer considers two (or more) products to be an either-or choice. Only one will be purchased. Recognize an example. Complements - the consumer must buy both (or all) of these products together. They will not substitute for one another. Recognize an example. Law of Substitutes - substitute prices rise and fall together; the consumer choosing the cheapest alternative puts constant upward pressure on the demand for the cheapest substitute, raising its price Law of Complements - complementary prices change in opposite directions; a rising price for any one complement puts downward pressure on the demand for everything else in the consumer's budget, causing those other prices to fall.
Image of page 1

Subscribe to view the full document.

Surplus - quantity supplied is greater than quantity demanded; price must fall to clear the market Shortage - quantity demanded is greater than quantity supplied; price must rise to clear the market
Image of page 2
Image of page 3

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern