| A | B |
|---|
| market equilibrium | the state in which market supply and demand balance each other, and as a result prices become stable |
| diminishing utility | the idea that the more of an item that you use or consume, the less satisfaction you get from each additional unit consumed or used |
| product utility | the total satisfaction or value that you get from consuming a particular product or service |
| surplus | temporarily having more of a product than is demanded. Can cause the price to decrease. |
| shortage | temporarily not having enough of a product for what is demanded. Can cause the price to increase. |
| disequilibrium | when supply and demand do not meet each other and prices are not stable. |
| demand curve | a graph showing how the demand for a product or service varies with changes in its price. |
| demand schedule | table that shows the quantity demanded of a good or service at different price levels. |
| incentive | financial rewards provided to people to alter consumption and production patterns in an economy. |
| price ceiling | A limit to how HIGH a price for a product can get - usually set by governments on necessities like food or energy. |
| price floor | A limit to how LOW a price for a product can get - usually set by governments to protect producers from collapse. |
| product substitute | a product or good that acts as a replacement or alternative to a more popular item without noticeably affecting the composition or appearance, or the usefulness of the resulting product. |
| product compliement | a good that is usually used with something else. |
| demand elasticity | how much a change in price changes demand - wants or luxuries tend to have elastic demand |
| supply elasticity | how easily a produce can increase or decrease production when demand changes |
| inelastic demand | when a change in price does not effect demand - usually for NEEDS. |
| law of supply | generally, when prices go up, supply goes up; when prices go down, supply goes down. |
| law of demand | generally, when prices go up, demand goes down; when prices go down, demand goes up. |
| subsidies | a payment to individuals or businesses, usually in the form of a cash payment from the government in exchange for doing (or not doing) something. |
| market supply | the total amount of an item producers are willing and able to sell at different prices, over a given period of time |
| price controls | a government regulation establishing a maximum price to be charged for specified goods and services, especially during periods of war or inflation. |
