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27 Cards in this Set
- Front
- Back
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Demand-
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the desire, ability, and willingness to buy a product—can compete with others who have similar demands
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Microeconomics-
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the part of economic theory that deals with behavior and decision making by individual units, such as people and firms.
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Market Economy-
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people and firms act in their own best interests to answer the basic WHAT, HOW and FOR WHOM questions
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Demand Schedule-
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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-
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a graph showing the quantity demanded at each and every price that might prevail in the market
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Law of Demand-
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states that the quantity demanded varies inversely with its price
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Market Demand Curve-
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the demand curve that shows the quantities demanded by everyone who is interested in purchasing the product
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Marginal Utility-
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the extra usefulness or additional satisfaction a person gets from acquiring or using one more unit of a product
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Diminishing Marginal Utility-
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the principle which states that the extra satisfaction we get from using additional quantities of the product beings to decline.
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Change In Quantity Demanded
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a change that is graphically represented as a movement along the demand curve
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Income Effect
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the change in quantity demanded because of a change in price that alters consumers' real income
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Substitution Effect
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the change in quantity demanded because of the change in the relative price of the product
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Change In Demand
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consumers demand different amounts at every price, causing the demand curve to shift to the left of the right
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Elasticity
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a measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price
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Demand Elasticity
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the extent to which a change in price causes a change in the quantity demanded
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Elastic
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when a given change in prices causes a relatively larger change in quantity demanded
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Inelastic
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a given change in price causes a relatively smaller change in the quantity demanded
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Unit Elastic
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a given change in price causes a proportional change in quantity demanded. The percentage change in quantity equals the percentage change in price
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Law Of Supply
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the principle that suppliers will normally offer more for sale at high prices and less at lower prices
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Supply Schedule
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a listing of the various quantities of a particular product supplied at all possible prices in the market
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Supply Curve
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a graph showing the various quantities supplies at all possible prices that might prevail in the market at any given time
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Market Supply Curve
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the supply curve that shows the quantities offered at various prices by all firms that offer the product for sale in a given market
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Quantity Supplied
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the amount that producers bring to market at any given price
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A Change in Quantity Demanded
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the change in amount offered for sale in response to a change in price
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Change in Supply
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a situation where suppliers offer different amounts of products for sale at all possible prices in the market
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Subsidy
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a government payment to and individual, business or other group to encourage or protect a certain type of economic activity
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Supply Elasticity
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a measure of the way in which the quantity supplied responds to a change in price
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