MODULE 2

• demand - is a relation showing the quantities of a good that consumers are willing and able to buy per period at various prices, other things held constant (ceteris paribus)
• Individual demand - is the demand of an individual consumer
• market demand - is the sum of the individual demands of all consumers in the market. (McEachern & Burrow
• demand schedule - is a table showing the relationship between prices and the specific quantities demanded at each.
• demand curve - is a curve or line showing the quantities of a particular good demanded at various prices during a given period, other things constant
• market demand curve - is the sum of the individual demand curves for all consumers in the market.
• Law of Demand - states that the quantity of demanded products per period relates inversely to their price, other things constant (ceteris paribus)
• substitution effect - is felt when a product’s price changes demand due to people buying and consuming other substitute goods
• income effect - is felt when a product’s price changes a consumer’s real income or purchasing power (the capacity to buy within a given income).
• Marginal utility - is the change in total economic utility (or simply utility) resulting from a one-unit change (meaning buying more than one) when you consume a product or service.
• Economic utility - is the amount of satisfaction a consumer receives from the consumption of a product or service
• Law of Diminishing Marginal Utility - states that the more of the product or service an individual consumes per period, other things constant (ceteris paribus), the smaller the marginal utility of each additional unit consumed.
• demand function - shows the relationship between the demand for a commodity and the factors (product’s price, prices of related products, level of income, taste, preferences, etc.) that determine or influence this demand. It is expressed as a mathematical function. (Viray Jr. & Avila-Bato, 2018)
• Taste or preference - is consumers' personal likes or dislikes for certain goods and services.
• Population Change - An increase in the demand for some goods or services, particularly for basic goods, results from an increasing population. There is a decline in demand due to a decrease in population.
• Occasional or Seasonal Products - Various events and seasons within the year may cause a movement on the demand curve for specific goods.
• Substitute and Complementary Goods - Substitute goods are interchanged with another good, usually offered at a lower price, thus making them more attractive to customers
• Expectations of Future Prices - If customers expect the price of a product or service to increase (or decrease) in the future, it may lead to an increase (or decrease) in current demand. Future expectations may alter the demand for a specific good.
• supply - is a relation showing the quantities of goods producers are willing and able to sell at various prices at a given period, and other things are held constant.
• individual supply - is the supply of an individual producer
• market supply - is the supply from all producers in the market for that good. (McEachern & Burrow, 2017)
• supply schedule - is a table listing the various prices of a product and the specific quantities supplied at each of these prices at a given time
• supply curve - is a curve or line showing the quantities of a particular good supplied at various prices during a given period and other things held constant. The market supply curve shows the total quantities of all producers at various prices. It is simpl
• market supply curve - shows the total quantities of all producers at various prices.
• quantity supplied - is the amount offered for sale at a specific price, as shown by the point on the given supply curve.
• Law of Supply - states that the quantity of product supplied during a period is usually directly related to its price, other things constant (ceteris paribus).
• supply function - is a mathematical notation that links the dependent variable, quantity supplied (QS), with various independent variables that determine quantity supplied. T
• Optimization in the Use of Factors of Production - An increase in supply will happen when there is an optimization of the utilization of production factors (economic resources). However, a decrease in the supply will occur when there is a failure to optimize
• Technological Change - There is an increase in the supply brought by the introduction of cost-reducing innovations
• Future Expectations - These can impact not just buyers but also sellers. If there is an anticipation of an increase in prices, sellers may choose to hold back the current supply, taking advantage of the future price increase, consequently decreasing market supply
• Number of Sellers - A greater supply of products and services will be available if more sellers are in the market – such a variable directly impacts the quantity supplied.
• Weather Conditions - There is a reduction in the supply of agricultural commodities during natural disasters. It is the opposite when there is good weather.
• Government Policies - When quotas and tariffs on imported products are removed, there is an effect on the supply, and when restrictions and quotas or tariffs are lowered, there is a boost in the supply of goods in the market due to imports. Importers pay the government tariffs or duties and taxes for their products to be accepted in a country
• Market equilibrium - is when the quantity consumers are willing and able to buy equals the quantity producers are willing and able to sell.
• Consumer surplus - is the difference between what consumers are willing and able to pay for a given quantity of a good and what they pay
• Price controls - are the government’s specification of minimum or maximum prices for certain goods and services when the government considers existing prices disadvantageous to the producer or consumer.
• price floor (floor price) - is a legal minimum price below which a product cannot be sold. T
• price ceiling - is a legal maximum selling price above which a product cannot be sold. For an impact to occur, a price floor is set above the equilibrium price, while a price ceiling is positioned below the equilibrium price
• Law of Supply and Demand - states that price decreases when supply is greater than demand and increases when demand is greater than supply (Leaño Jr., 2016)