| Term | Definition |
|---|
| demand | the desire to own something and the ability to pay for it |
| law of demand | consumers buy more of a good when its price decreases and less when its price increases |
| substitution effect | when consumers react to an increase in a good's price by consuming less of that good and more of other goods |
| income effect | the change in consumption resulting from a change in real income |
| demand schedule | a table that lists quantity of a good a person will buy at each different price |
| market demand schedule | a table that lists the quantity of a good all consumers in a market will buy at each different price |
| demand curve | a graphic representation of a demand schedule |
| ceteris paribus | latin phrase that means "all other things held constant" |
| normal good | a good that consumers demand more of when their incomes increase |
| inferior good | a good that consumers demand less of when their incomes increase |
| complements | two goods that are bought and used together |
| substitutes | goods used in place of one another |
| elasticity of demand | a measure of how consumers react to a change in price |
| inelastic | describes demand that is not very sensitive to a change in price |
| elastic | describes demand that is very sensitive to a change in price |
| unitary elastic | describes demand whose elasticity is exactly equal to 1 |
| total revenue | the total amount of money a firm receives by selling goods or services |
Combine with other sets
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