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16 terms

Ch. 4 Economics

STUDY
PLAY
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 goods 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 the 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
a Latin phrase that means "all other things held constant"
normal good
a good that consumers demand more of when their incomes increase
complements
two goods that are brought and used together
substitutes
goods used in place of one another
elasticity of demand
describes demand that is not very sensitive 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 one
total revenue
the total amount of money a firm receives by selling goods or services