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19 terms

Economics Chapter 3 TRIPE

STUDY
PLAY
demand
TRIPE
Tastes and Preferences
(T)
Related Goods
(R)
Income
(I)
Population
(P)
Expected Price
(E)
Tastes and Preferences
more desirable = more demand at each price; less desirable = decrease demand; new products change tastes
Related Goods
substitute goods can be used in place of another good (coke for pepsi); complementary goods are used together (PB and J)
Substitute Goods
increase in price of one good increases demand for the other; decrease in price of one good will decrease demand for the other; if pepsi price goes up, more people will buy coke
Complementary goods
demanded jointly; if price of good goes up, demand for related good will decline (lettuce price increases, dressing demand decreases); price of good goes down, demand for related good goes up (price of tuition goes down, demand for textbook goes up)
Income
rise in this increases demand for goods; if this falls the decrease in demand for goods fall; normal goods vary directly with it; inferior goods vary inversely with it; more of this makes customers buy newer/more expensive versions of products
Population
increase in buyers = increase in demand; decrease in buyers = decrease in demand;
Expected Prices
expectation of future high prices makes a current demand increase; future decrease in price or higher income create a future demand increase; increase in demand make consumers decide to buy larger quantities of a product at each possible price
Demand
amount of product consumers are willing/able to purchase at possible prices during a period of time; price depends on relation between supply and demand
Law of Demand
(all else equal) as price falls, quantity demanded rises; as price rises, quantity demanded falls
Increase in Demand
consumers desire to buy more at each possible price (right)
decrease in demand
consumers buy less at each possible price (left)
normal goods
Goods for which demand goes up when income is higher and for which demand goes down when income is lower; varies directly with money income
inferior goods
a good that consumers demand less of when their incomes increase; varies inversely with money income