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Cards In This Set
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Market
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A group of buyers and sellers of a particular good or service
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Competitive market
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A market in which there are many buyers and many sellers so that each has a negligible impact on the market price
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Quantity Demanded
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The amount of a good that buyers are willing and able to purchase.
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Law of Demand
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THe claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
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Demand Schedule
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A table that shows the relationship between the price of a good and the quantity demanded
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Demand Curve
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A graph of the relationship between the price of a good and the quantity demanded.
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Normal Good
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a good for which, other things equal, an increase in income leads to an increase in demand.
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Inferior Good.
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A good for which, other things equal an increase in income leads to a decrease in demand.
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Substituttes
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Two goods for which an increase in the price of one leads to an increase in the demand for the others.
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Compleements
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Two goods for which an increase in the price of one leads ro a decrease in the dmand for other.
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Quantity supplied
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THe amount of a good that sellers are willing and able to sell.
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Law of supply
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The claim that other things equal the quantity supplied of a good rises when the price of the good rises.
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Supply curve
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A graph of the relationshipss between the price of a good and the quantity supplied.
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Equilibrium
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A situation in which the market price has reached the level at which quantity supplied equals quantity demanded.
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Equilibrium price
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THe price that balances quantity supplied and quantity demanded.
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