Term Definition
demand the desire, willingness,and ability to buy a good or service
demand schedule table showing quantities demanded at different possible prices
demand curve downward-sloping line that graphically shows the quantities demanded at each possible price
law of demand the concept that people are normally willing to buy less of a product if the price is high and more of it if the price is low
market demand the total demand of all consumers for their product or service
utility the amount of satisfaction one gets from a good or service
marginal utility additional satisfaction from each additional slice that you eat.
substitute a competing product that consumers can use in place of another
complement product often used with another product
demand elasticity measure of responsiveness relating change in quantity demanded to a change in price
supply the amount of goods and services that producers are able and willing to sell at various prices during a specified time period
law of supply the principle that suppliers will normally offer more for sale at higher prices and less at lower prices.
supply schedule table showing quantities supplied at different possible prices
supply curve upward-sloping line tat graphically shows the quantities supplied at each possible price
profit the money a business receives for its products or services over and above its costs
market supply the total of all the supply schedules of all the businesses that provide the same good or service
productivity the degree to which resources are being used efficiently to produce goods and services
technology the methods or processes used to make goods and services
subsidy a government payment to an individual, business, or group in exchange for certain actions
supply elasticity responsiveness of quantity supplied to a change in price
surplus situation in which quantity supplied is greater than quantity demanded
shortage situation in which quantity demanded is greater than quantity supplied
equilibrium price the price at which the amount producers are willing to supply is equal to the amount consumers are willing to buy
price ceiling maximum price that can be charged for goods and services, set by the government
price floor minimum price that can be charged for goods and services, set by the government
minimum wage lowest legal wage that can be paid to most U.S. workers
Chapter 21

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