1. Economics, Standard E.1.5. By Jay Knoblock

2. Quantity Demanded Quantity Demanded: How much consumers will buy at one price. On a supply and demand graph, it is the ‘x’ coordinate for one particular price level Example: Q1 corresponds to price P1.

3. Demand Demand (D) is a schedule that shows the various amounts of a product that consumers are willing and able to buy at each specific price in a series of possible prices during a specified time period. It is a list of several prices (P) and their corresponding quantity demanded (Q) values.

4. Demand Curve The demand Curve is the graphical representation of the demand schedule. It may be for an individual or for an entire market.

5. The Law of Demand The Law of Demand: As price increases, corresponding quantity of demand falls, Ceteris Paribus. Ceteris Paribus means all else equal—nothing else changes.

6. Quantity Supplied Quantity Supplied: How much producers will produce and sell at one price. On a supply and demand graph, it is the ‘x’ coordinate for one particular price level Example: Q1 corresponds to price P1.

7. Supply Supply (S) is a schedule that shows the various amounts of a product that producers are willing and able to produce and sell at each specific price in a series of possible prices during a specified time period. It is a list of several prices (P) and their corresponding quantity supplied (Q) values.

8. Supply Curve The Supply Curve is the graphical representation of the supply schedule. It may be for an individual or for an entire market.

9. The Law of Supply The Law of Supply: As price increases, corresponding quantity of supply increases, Ceteris Paribus.

10. Supply and Demand Supply and Demand are graphed together on a graph according to their respective schedules.

11. Equilibrium A competitive market is in equilibrium when price has moved to a level at which the quantity demanded of a good equals the quantity supplied of that good. It is the point (E) where the supply and demand curves intersect.

12. Shortage A shortage occurs when quantity of demand is temporarily greater than quantity of supply. When this happens, we can expect the price to rise to level things out and move the market back to equilibrium. Example: Ticket prices

13. Surplus A surplus occurs when the quantity of supply is greater than the quantity of demand When this happens, we can expect the price to fall to level things out and move the market back to equilibrium. Example: Ticket prices

14. Price Controls When the government intervenes to regulate prices, we say that they impose price controls, or legal restrictions on how high or low a market price may go. This tends to cause certain predictable and unpleasant side effects.

15. Price Ceiling A price ceiling is a top end price on the market that is designed to protect the buyers and keep prices low. When the price ceiling is below equilibrium, it is said to be binding, which causes a shortage.

16. Price Ceiling Inefficiencies The following are inefficiencies caused by price ceilings: Inefficient allocation to consumers Wasted Resources Inefficiently low quality Black markets

17. Price Ceiling Examples Examples of Price Ceilings Include: The Oil embargo in 1973 to prevent US companies from gauging Apartment Rental prices in New York City after World War II http://www.econlib.org/library/Enc/PriceControls.html

18. A price floor is a setting a bottom price on the market that is designed to protect the sellers and keep prices high. When the price floor is above equilibrium, it is said to be binding, which causes a surplus.

19. Examples of Price floors include: Minimum Wage Government subsidies on Agricultural products

20. The following are inefficiencies caused by price floors: Inefficient allocation of sales among sellers Wasted Resources Inefficiently high quality Black markets http://www.youtube.com/watch?v=ca8Z__o52sk