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15 Cards in this Set

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  • Back
all instutions or mechanisms that bring together buyers(demanders) and sellers(suppliers) of particular goods and services.
A schedule or curve that shows the various amounts of a product that consumers are willing and able to purchase at each of a series of possible prices during a specified period of time.
demand schedule
A hypothetical table that illustrates price vs. demand.
law of demand
All else equal; As price falls the quantity demanded rises and as price rises the quantity demanded falls.
diminishing marginal utility
In a specific time period, each buy of a product will derive less satisfaction (or benefit) from each successive unit of the product consumed.
income effect
It indicates that a lower price increases the purchasing power of a buyer's money income. Therefore enabling the buyer to purchase more of the product than he or she could buy prior.
substitution effect
Suggest that at a lower price buyer's have the incentive to subsititute what is now a less expensive product for similar products that are now realitvely more expensive.
demand curve
The inverse relationship between price and quantity demanded for any product, illustrated.
determinants of demand
Factors other than price that influence demand.
normal goods
Products that demand varies greatly with money income are called superior goods or x.
inferior goods
Products that demand varies inversley with money income.
substitute goods
one that can be used in place of another good.
complimentary good
on that is used together with another good.
change in demand
Not to be confused with quantity demanded. A shift of the demand curve. Occurs because the consumers state of mind about purchasing the product has been altered according to a determinant of demand. It is noted by a change in the schedule of demand and a shift in the curve.
Change in quantity demanded
A movement from one point to another on the demand curve.