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16 Cards in this Set
- Front
- Back
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Demand |
The relationship between the price and quantity demanded for a good or service when other variables are held constant. |
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The Law of Demand |
States there is an inverse relationship between the price of a good or service and the quantity buyers purchase. |
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Demand Schedule |
A table that lists the quantity of a good or service consumers purchase at various possible prices. |
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Demand Curve |
Formed by the line connecting points that represent possible combinations of price and quantity purchased by consumers. It is an inverse relationship. |
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Individual Demand Curve |
The demand of a single consumer. |
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Market Demand Curve |
The sum of all the individual demand curves in a market. |
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Quantity Demanded |
The amount of goods and services purchased at a given price. |
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What are the 5 factors? |
Income, Number of buyers, Tastes, Expectations or rumors, and Price of related goods. |
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Substitutes |
Goods that compete for consumers purchases. There is a direct relationship between a price change for one good and the demand for its “competitors” good. |
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Complements |
Goods that consumers purchase together with another good. |
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Normal Goods |
Any good that has a direction relationship between changes in income and its demand curve. A rise in income results in an increase purchases of normal goods. |
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Inferior Goods |
Any good for which there is an inverse relationship between changes in income and its demand curve. A rise in income results in reduced purchases of inferior goods. |
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Total Revenue |
The total dollars a firm receives from the sale of a good service. |
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Elastic Demand |
A small change in price causes a large change in demand. |
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Inelastic Demand |
A small change in price causes little change in demand. |
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Principle of Diminishing Marginal Utility |
As consumers get more and more of a given good they are less eager to buy it. |
