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13 terms

Chapter 4: Microeconomics

STUDY
PLAY
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