ECON-1006EL Chapter Notes - Chapter 3: Demand Curve, Shortage, Economic Equilibrium

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rubygoose773

23 May 2018

School

Laurentian

Department

Economics / Science Èconomique

Course

ECON-1006EL

Professor

Eastman

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Chapter 3: Demand, Supply, and Price

Definitions

Quantity Demanded

The amount of a good or service that consumers want to purchase

during some time period

Demand Schedule

A table showing the relationship between quantity demanded and the

price of a commodity, other things being equal

Demand Curve

The graphical representation of the relationship between quantity

demanded and the price of a commodity, other things being equal

Demand

The entire relationship between the quantity of a commodity that

buyers want to purchase and the price of that commodity, other things

being equal

Substitutes in Consumption

Goods that can be used in place of another good to satisfy similar

needs or desires

Complements in Consumption

Goods that tend to be consumed together

Changes in Demand

A change in the quantity demanded at each possible price of the

commodity, represented by a shift in the whole demand curve

Change in Quantity Demanded

A change in the specific quantity of the good demanded, represented

by a change from one point on a demand curve to another point,

either on the original demand curve or on a new one

Quantity Supplied

The amount of a commodity that producers want to sell during some

time period

Supply Schedule

A table showing the relationship between quantity supplied and the

price of a commodity, other things being equal

Supply Curve

The graphical representation of the relationship between quantity

supplied and the price of a commodity, other things being equal

Supply

The entire relationship between the quantity of some commodity that

producers wish to sell and the price of that commodity, other things

being equal

Change in Supply

A change in the quantity supplied at each possible price of the

commodity, represented by a shift in the whole supply curve

Change in Quantity Supplied

A change in the specify quantity supplied, represented by a change

from one point on a supply curve to another point, either on the

original supply curve or on a new one

Market

Any situation in which buyers and sellers can negotiate the exchange

of goods or services

Excess Demand

A situation in which, at the given price, quantity demanded exceeds

quantity supplied

Excess Supply

A situation in which, at a given price, quantity supplied exceeds

quantity demanded

Equilibrium Price (Market-

Clearing Price)

The price at which quantity demanded equals quantity supplied

Disequilibrium Price

A price at which quantity demanded does not equal quantity supplied

Disequilibrium

A situation in a market in which there is excess demand or excess

supply

Comparative Statics

The derivation of predictions by analyzing the effect of a change in

some exogenous variable on the equilibrium

Absolute Price (Money Price)

The amount of money that must be spent to acquire one unit of

commodity

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Document Summary

The amount of a good or service that consumers want to purchase during some time period. A table showing the relationship between quantity demanded and the price of a commodity, other things being equal. The graphical representation of the relationship between quantity demanded and the price of a commodity, other things being equal. The entire relationship between the quantity of a commodity that buyers want to purchase and the price of that commodity, other things being equal. Goods that can be used in place of another good to satisfy similar needs or desires. Complements in consumption goods that tend to be consumed together. A change in the quantity demanded at each possible price of the commodity, represented by a shift in the whole demand curve. Change in quantity demanded a change in the specific quantity of the good demanded, represented.

Related Questions

Which of the following is the correct definition of demand schedule?

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

b. A table showing the relationship between the price of a product and the quantity of the product demanded.

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

maroonferret252

Any point along the market demand curve shows

1. the quantity of the good that firms would be willing and able to supply at a specific price

2. the relationship between the price of the good and total quantity demanded at a series of prices

3. the opportunity cost of supplying a given quantity of goods to the market

4. the quantity of the good that consumers would be willing and able to purchase at a specific price

5. how population changes affect the quantity demanded at a specific price

purplewhale646

17. Which of the following is a determinant of supply?

A. Tastes and preferences

B. Price of a complementary good

C. Consumer income

D. Technology

18. A market is in equilibrium:

A. provided there is no surplus of the product

B. at all prices above that shown by the intersection of the supply and demand curves

C. if the amount producers want to sell is equal to the amount consumers want to buy

D. whenever the demand curve is downsloping and the supply curve is upsloping.

19. If the market price is above the equilibrium price:

A. A shortage will occur and producers will produce more and lower prices

B. A surplus will occur and producers will produce less and lower prices

C. A surplus will result and consumers will bid prices up

D. Producers will make extremely high profits

20. The market system automatically corrects a surplus condition in a competitive market by:

A. Raising the price of the commodity in question while increasing the quantity demanded

B. Raising the price of the commodity in question while decreasing the quantity demanded

C. Reducing the price of the commodity in question while increasing the quantity demanded

D. Reducing the price of the commodity in question while decreasing the quantity demanded

21. The price elasticity of demand measures:

A. buyer responsiveness to price changes.

B. the extent to which demand curve shifts as incomes change.

C. the slope of the demand curve.

D. how far business executives can stretch their fixed costs

22. The elasticity of demand for a product is likely to be greater:

A. if the product is a necessity, rather than a luxury good.

B. the greater the amount of time over which buyers adjust to a price change

C. the smaller the proportion of one's income spent on the product.

D. the smaller the number of substitute products available.

23. Market failure is said to occur whenever:

A. private markets do not allocate resources in the most economically desirable way

B. prices rise

C. some consumers who want a good do not obtain it because the price is higher than they are willing to pay

D. government intervenes in the functioning of private markets.

24. A negative externality or spillover cost occurs when:

A. firms fail to achieve allocative efficiency.

B. firms fail to achieve productive efficiency.

C. the price of the good exceeds the marginal cost of producing it.

D. the total cost of producing a good exceeds the costs borne by the producer

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ECON-1006EL Chapter Notes - Chapter 3: Demand Curve, Shortage, Economic Equilibrium

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