market
any place where goods are bought and sold.
factor market
any place where factors of production are bought and sold.
product market
any place where finished goods and services (products) are bought and sold.
barter
the direct exchange of one good for another, without the use of money.
supply
the ability and willingness to sell (produce) specific quantities of a good at alternative prives in a given time period, ceteris paribus.
demand
the ability and willingness to buy specific quantities of a good at alternative prives in a given time period, ceteris paribus.
opportunity cost
the most desired goods or services that are forgone in order to obtain something else.
demand schedule
a table showing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus.
demand curve
a curve describing the quantities of a good a consumer is willing and able to buy at alternative prices in a given time period, ceteris paribus.
law of demand
the quantity of a good demanded in a given time period increases as its price falls, ceteris paribus.
ceteris paribus
the assumption of nothing else changing.
shift in demand
a change in the quantity demanded at any (every) given price.
market demand
the total quantities of a good or service people are willing and able to buy at alternative prices in a given time period; the sum of individual demands.
market supply
the total quantities of a good that sellers are willing and able to sell at alternative prices in a given time period, ceteris paribus.
law of supply
the quantity of a good supplied in a given time period increases as its price increases, ceteris paribus.
equilibrium price
the price at which the quantity of a good demanded in a given time period equals the quantity supplied.
market shortage
the amount by which the quantity demanded exceeds the quantity supplied at a given price: excess demand.
market surplus
the amount by which the quantity supplied exceeds the quantity demanded at a given price: excess supply.
price ceiling
upper limit imposed on the price of a good or service.
price floor
lower limit imposed on the price of a good.
government failure
government intervention that fails to improve economic outcomes.
laissez faire
the doctrine of "leave it alone," of nonintervention by government in the market mechanism.
market mechanism
the use of market prices and sales to signal desired outputs (or resource allocations).