Unit 3 Vocabulary

When a good’s price is lower, consumers will buy more of it. When the price is higher, consumers will buy less of it.

A table that lists the quantity of a good that a person will purchase at various prices in a market.

When the price increases on goods, or one’s income is less, consumers will cut back on their spending on those goods without increasing spending on other goods.

A graphic representation of a demand schedule

Shows the quantities demanded at various prices by ALL consumers in the market.

A Latin phrase meaning “all things held constant” that is the assumption of demand when only the price has changed and all other factors are being held constant.

Factors besides price that cause the demand for a good to change. These lead to shift in the demand.

When a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good.

Goods that consumers demand more of when their income increases.

If you buy much less of a good after a small price increase

Exists when the quantity supplied in a market is more than the quantity demanded.

The amount of a good or service that is available.

Goods that you would buy in smaller quantities, or not at all, if your income were to rise and you could afford something better.

The desire to own something and the ability to pay for it

Producers will offer more of a good or service as its price increases and less as its price falls.

Goods that are used in place of one another

If you buy the same amount or just a little less of a good after a large price increase

Exists when the quantity demanded in a market is more than the quantity supplied

A cost that does not change no matter how much of a good is produced.

When fixed and variable costs are added together.

Two goods that are bought and used together

The point of balance at which the quantity demanded equals the quantity supplied. Where the market for a good is stable.

Costs that rise or fall depending on the quantity produced.

Occurs when quantity supplied is not equal to quantity demanded in a market.