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15 Cards in this Set
- Front
- Back
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market
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all instutions or mechanisms that bring together buyers(demanders) and sellers(suppliers) of particular goods and services.
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demand
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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.
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demand schedule
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A hypothetical table that illustrates price vs. demand.
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law of demand
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All else equal; As price falls the quantity demanded rises and as price rises the quantity demanded falls.
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diminishing marginal utility
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In a specific time period, each buy of a product will derive less satisfaction (or benefit) from each successive unit of the product consumed.
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income effect
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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.
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substitution effect
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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.
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demand curve
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The inverse relationship between price and quantity demanded for any product, illustrated.
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determinants of demand
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Factors other than price that influence demand.
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normal goods
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Products that demand varies greatly with money income are called superior goods or x.
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inferior goods
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Products that demand varies inversley with money income.
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substitute goods
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one that can be used in place of another good.
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complimentary good
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on that is used together with another good.
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change in demand
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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.
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Change in quantity demanded
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A movement from one point to another on the demand curve.
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