price level

excess demand at the existing price, the quantity demanded exceeds the quantity supplied; also called a

shortage

excess supply at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus

factors of production the resources such as labor, materials, and machinery that are used to produce goods

and services; also called inputs

inferior good a good in which the quantity demanded falls as income rises, and in which quantity demanded

rises and income falls

inputs the resources such as labor, materials, and machinery that are used to produce goods and services;

also called factors of production

law of demand the common relationship that a higher price leads to a lower quantity demanded of a certain

good or service and a lower price leads to a higher quantity demanded, while all other variables are held

constant

law of supply the common relationship that a higher price leads to a greater quantity supplied and a lower
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