Key Terms

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

Competitive market
Supply and demand model
Demand schedule
Quantity demanded
Demand curve
Law of demand
Shift of the demand curve
Movement along the demand curve
Substitutes
Complements
Normal good
Inferior good
Individual demand curve
Quantity supplied
Supply schedule
Supply curve
Shift of the supply curve
Movement along the supply curve
Input
Individual supply curve
Equilibrium price
Equilibrium quantity
Marketclearing price
Surplus
Shortage
a change in the quantity supplied of a good or service at any given price, represented graphically by the change of the original supply curve to a new position, denoted by a new supply curve
shows how much of a good or service consumers will want to buy at different prices
the actual amount of a good or service producers are willing to sell at some specific price
a list or table showing how much of a good or service producers will supply at different prices
a change in the quantity demanded at any given price, represented by the change of the original demand curve to a new position, denoted by a new demand curve
a graphical representation showing the relationship between quantity supplied and price
a change in the quantity supplied of a good that results from a change in the price of that good
the price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the equilibrium price.
a market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold
the principle that a higher price for a good or service, other things equal, leads people to demand a smaller quantity of that good or service
a good for which a rise in income decreases the demand for the good
a good or service used to produce another good or service
the price at which the market is in equilibrium, that is, the quantity of a good or service demanded equals the quantity of that good or service supplied; also referred to as the marketclearing price.
the excess of a good or service that occurs when the quantity supplied exceeds the quantity demanded; surpluses occur when the price is above the equilibrium price.
the insufficiency of a good or service that occurs when the quantity demanded exceeds the quantity supplied; shortages occur when the price is below the equilibrium price.
a model of how a competitive market works
a change in the quantity demanded of a good that results from a change in that good’s price
a graphical representation of the demand schedule, showing the relationship between quantity demanded and price
illustrates the relationship between quantity supplied and price for an individual consumer
pairs of goods for which a rise in the price of one good leads to a decrease in the demand for the other good
pairs of goods for which a rise in the price of one of the goods leads to an increase in the demand for the other good
the actual amount of a good or service consumers are willing to buy at some specific price
a good for which a rise in income increases the demand for that good—the “normal” case
a graphical representation of the relationship between quantity demanded and price for an individual consumer
the quantity of a good or service bought and sold at the equilibrium (or marketclearing) price.

Competitive market, p. 70

Supply and demand model, p. 70

Demand schedule, p. 71

Quantity demanded, p. 71

Demand curve, p. 72

Law of demand, p. 72

Shift of the demand curve, p. 73

Movement along the demand curve, p. 73

Substitutes, p. 75

Complements, p. 75

Normal good, p. 76

Inferior good, p. 76

Individual demand curve, p. 77

Quantity supplied, p. 80

Supply schedule, p. 80

Supply curve, p. 80

Shift of the supply curve, p. 81

Movement along the supply curve, p. 81

Input, p. 83

Individual supply curve, p. 84

Equilibrium price, p. 87

Equilibrium quantity, p. 87

Market-clearing price, p. 87

Surplus, p. 89

Shortage, p. 90