Econ Unit 2: Week 3 Key Terms

1. The different quantities of goods that consumers are willing and able to buy at different prices.

• Supply

• 1. Law of supply

• Demand

• 1. Law of demand

1. Describes that there is an inverse relationship between price and quantity demanded.

• Supply

• 1. Law of supply

• Demand

• 1. Law of demand

1. If the price goes up for a product, consumers buy less of that product and more of another substitute

• 1. The income effect

• 1. The substitution effect

• 1. Law of diminishing marginal utility

• 1. Law of demand

1. If the price goes down for a product, the purchasing power increases for consumers, allowing them to purchase more.

• 1. The income effect

• 1. The substitution effect

• 1. Law of diminishing marginal utility

• 1. Law of demand

1. The more you buy and use a good or product, satisfaction for that product declines.

• 1. The income effect

• 1. The substitution effect

• 1. Law of diminishing marginal utility

• 1. Law of demand

1. The different quantities of a good that sellers are willing and able to sell (produce) at different prices.

• 1. Supply

• 1. Law of supply

• Demand

• 1. Law of demand

1. There is a direct (or positive) relationship between price and quantity supplied.

• Supply

• 1. Law of supply

• 1. Demand

• 1. Law of demand

1. The point at which quantity supplied equals quantity demanded.

• Surplus

• Shortage

• Equilibrium

• Disequilibrium

1. The condition in which the quantity supplied of a good is greater than the quantity demanded

• Surplus

• Shortage

• Equilibrium

• Disequilibrium

1.  The condition in which the quantity demanded of a good is greater than the quantity supplied

• Surplus

• Shortage

• Equilibrium

• Disequilibrium