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### 23 Cards in this Set

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• Back
 The desire, ability, and willingness to buy a product demand 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 demand schedule a graph showing the quantity demanded at each and every price that might prevail in the market demand curve the quantity demanded of a good or service varies inversely with its price; when a price goes up, quantity demand goes down and vice versa Law of Demand the change in quantity demanded because of a change in price that alters consumer's real income income effect the change in quantity demanded because of the change in the relative price of the product. substitution effect the extra satisfaction we get from using additional quantities of the product begins to diminish diminishing marginal utility What is the difference between a change in the Quantity Demanded and a Change in Deman? A change in quantity demanded is a movement along the demand curve that shows a change in the quantity of the product purchased in response to a change in price. A change in demand is when people buy different amounts of the product without a change in price. Explain three things that will cause the demand curve to shift. Demand can be changed because of changes in income, tastes, the price of related goods, expectations, and the number of consumers. the extent to which a change in price causes a change in the quantity demanded demand elasticity a given change in price causes a relatively larger change in quantity demanded elastic demand a given change in price causes a relativly smaller change in the quantity demanded inelastic demand Provide an example with elastic demand green beans, corn, tomatoes, or other fresh garden vegetables. b/c prices are lower in the summer, consumers increase the amount they purchase Provide an example of inelastic demand typical with table salt. A lower or higher price for table salt does not bring about much change in the quantity purchased. List the determinants of demand elasticity Can the purchase be delayed? Are adequete substitues available? Does the purchase use a large portion of income? the amount of a product that would be offered for sale at all possible prices that could prevail in the market supply a listing of the various quantities of a particular supplied at all possible prices in the market supply schedule a graph showing the various quantities supplied at each and every price that might prevail in the market supply curve the principle that suppliers will normally offer more for sale at high prices and less at lower prices Law of Supply List the seven things that would cause a change in supply Cost of inputs Productitivity Technology Taxes and Subsidies Expectations Government Regulations Number of Sellers a situation in which the quantity demanded is greater than the quantity supplied at a given price shortage a situation in which the quantitiy supplied is greater than the quantitiy demanded at a given price surplus the price that clears the market by leaving neither a surplus nor a shortage at the end of a trading period equilibrium price