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19 Cards in this Set
- Front
- Back
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demand |
desire, ability, and willingness to buy a product |
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microeconomics |
area of economics that deals with behavior and decision making by small units |
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demand schedule |
listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time |
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demand curve |
graph showing the quantity demanded at each and every price that might prevail in the market |
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Law of Demand |
states that the quantity demanded of a good or service varies inversely with its price |
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market demand curve |
demand curve that shows the quantities demanded by everyone who is interested in purchasing the product |
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marginal utility |
the extra usefulness or satisfaction a person gets from acquiring or using one or more unit of a product |
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diminishing marginal utility |
states that the extra satisfaction we get from using additional quantities of the product begin to diminish |
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change in quantity demanded |
a movement along the demand curve that shows a change in the quantity of the product purchased in response to a change in price |
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income effect |
change in quantity demanded cause of a change in price that alters consumers' real income |
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substitution effect |
change in quantity demanded because of the change in the relative price of the product |
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change in demand |
something happens to cause the demand curve to shift because people are now willing to buy different amounts of the product at the same prices |
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substitutes |
products that can be used in place of other products |
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complements |
use of one good increases the use of another |
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elasticity |
measure of responsiveness that tells us how a depended variable such as quantity responds to a change in an independent variable such as price |
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demand elasticity |
the extent to which a change in price causes a change in the quantity demanded |
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elastic |
when a given change in price causes a relatively larger change in quantity demanded |
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inelastic |
a given change in price causes a relatively smaller change in the quantity demanded |
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unit elastic |
a given change in price causes a proportional change in quantity demanded |
