EC 202 Study Guide - Midterm Guide: Ceteris Paribus, Inferior Good, Normal Good
18 May 2019
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Document Summary
Demand schedule - a table that shows the relationship between the price of a product and the quantity demanded, ceteris paribus. The individual demand curve - a curve that shows the relationship between the price of a good and quantity demanded by an individual consumer, ceteris paribus. Law of demand - there is a negative relationship between price and quantity demanded. Aka, if price goes up demand will go down. Market demand - the sum of the demands of all consumers. Law of supply - there is a positive relationship between price and quantity supplied, ceteris paribus. Market equilibrium - a situation in which the quantity demanded equals the quantity supplied at the prevailing market price - used to predict how markets are going to behave and what"s going to happen to the market. Normal good - a good for which an increase in income increases demand. Demand shifts to the right (increases) with an increase in income.
