Chapter 4: Microeconomics
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13 terms
Terms | Definitions |
|---|---|
 Change in demand | indicates a shift in the entire demand curve to the right or left. (Right-increase.. left-decrease) |
| Change in quantity demanded | indicates movement along the same demand curve to a lower or higher price and quantity demanded. |
| Substitutes | Substitutes (goods)as price of substitute decreases, demand for the original item also decreases. |
| Complements | a decrease in the price of a good leads to an increase in the demand for its complementary good. |
| Elastic | goods for which the rise or fall in price greatly affects the amount of the product that people are willing to buy/demand. |
| inelastic | if a price change DOES NOT result in a substantial change in quantity demanded. EX: sugar, milk, salt |
| demand curve | a graph showing the quantity demanded at each and every price that might prevail in the market. |
| demand schedule | a listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time |
| law of demand | as the price of a good or service falls, a larger quantity will be bought; as the price of the good or service rises a smaller quantity will be bought. |
| Substitute effect | if the price of one similar item rises in relation to the price of another, people will substitutes the lower priced item. |
| demand | desire to own a product. |
| utility | the power that a good or service has to satisfy a want |
| marginal utility | amount of additional satisfaction |
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