So, I was having some trouble with definitions, so I made an entry in my notes (hope all these terms don't hurt eyes):

Definitions of capitalist economics terms

• Downward sloping demand curve:
  • As the price increases, quantity demanded decreases
  • X axis: Quantity demanded
  • Y axis: Price of product
• Price elasticity of demand of a product:
  • A measure of how sensitive the quantity demanded is to its price
    • Higher elasticity means higher sensitivity
• Rising supply curve:
  • As the price of a commodity increases, the quantity supplied will increase
  • X axis: Quantity demanded
  • Y axis: Price of product
• General equilibrium theory:
  • Seeks to prove that the interaction of demand and supply will result in an overall general equilibrium:
    • A market in which the quantity supplied for every product or service, including labor, equals the quantity demanded at the current price
    • Junction points of demand and supply curves (they are supposed to be sloping inversly)
• Perfect competition:
  • The ideal conditions (in theoretical models) of perfect competition, under which a market will reach a general equilibrium
• Horizontal demand curve:
  • A change in price leads to a significant shift in demand
    • Huge increase in quantity of demand with virtually no drop in price
  • Means demand curve is perfectly elastic
• Rational expectations theory:
  • Seeks to infer the macroeconomic consequences of individuals' decisions based on all available knowledge
  • It assumes that individuals' actions are based on the best available economic theory and information