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15 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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subsitution effect ***
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when consumers react to an increase in a goods price by consuming less of that good and more of another good.
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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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market demand schedule
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a table that lists the quanitiy of a good all consumers in a maket will buy at a diffrent price.
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demmand curve
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a graphic representation of a demand schedule.
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ceteris paribus
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in latin; a 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 income increases.
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complements
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two goods that are bought and used together.
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subsitutes
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goods used in place of 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 senesitve 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 demant whose elasticity is exactly equal to one.
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total revenue
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the total amount of money a firm recieves by selling goods and services.
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