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17 Cards in this Set
- Front
- Back
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Demand
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The desire to own something and the ability to pay for it
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Law of demand
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Consumers buy more of a good when its price decreases and less when its price increases
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Substitution effect
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When consumers react to an increase in a good's price by consuming less of that good and more of other goods
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Income effect
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The change in consumption resulting from a change in real income
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Demand schedule
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A table that lists the quantity of a good a person will buy at each different price
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Market demand schedule
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A table that lists the quantity of a good all consumers in a market will buy at each different price
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Demand curve
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A graphic representation of a demand schedule
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Ceteris paribus
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A Latin phrase that means "all other things held constant"
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Normal good
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A good that consumers demand more of when their incomes increase
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Inferior good
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A good that consumers demand less of when their income increases
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Complements
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Two goods that are bought and used together
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Substitutes
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Goods used in place of one another
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Elasticity of demand
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A measure of how consumers react to a change in price
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Inelastic
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Describes demand that is not very sensitive to a change in price
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Elastic
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Describes demand that is very sensitive to a change in price
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Unitary elastic
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Describes demand whose elasticity is exactly equal to one
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Total revenue
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The total amount of money a firm receives by selling goods or services
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