7 Demand Flashcards

1
Q

individual behavior

A

microeconomics

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2
Q

market is the central idea

A

microeconomics

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3
Q

the relationship between buyers and sellers

A

market in microeconomics

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4
Q

market force from customers

A

demand

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5
Q

willingness and ability to buy good/service

A

demand

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6
Q

desire and purchasing power must be present

A

demand

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7
Q

nothing else changes

A

ceteris paribus

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8
Q

inversely proportional law

A

law of demand

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9
Q

price is the only factor

A

law of demand

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10
Q

↑ price, ↓ demand
↓ price, ↑ demand

A

law of demand

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11
Q

change in price affects purchasing power of disposable income

A

income effect

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12
Q

change in price of substitute goods affects demand of other goods

A

substitution effect

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13
Q

↑ price, ↓ purchasing power
↓ price, ↑ purchasing power

A

income effect

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14
Q

↑ substitute price, ↑ demand of other
↓ substitute price, ↓ demand of other

A

substitution effect

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15
Q

consume until marginal utility is equal to marginal cost (price)

A

law of diminishing marginal utility

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16
Q

↑ consumed, ↓ utility

A

law of diminishing marginal utility

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17
Q

mathematical representative showing Qd and P

A

demand function

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18
Q

compute potential profit

A

forecasting

19
Q

table that shows change in Qd and change in P

A

demand schedule

20
Q

graph version of demand schedule

A

demand curve

21
Q

along demand curve; caused by change in price

22
Q

of demand curve; non-price factors

23
Q

↑ Qd, ↓ income
↓ Qd, ↑ income

A

change in income (inferior goods)

24
Q

↓ Qd, ↓ income
↑ Qd, ↑ income

A

change in income (normal goods)

25
same use; goods used in lieu of each other
substitute goods
26
must have both as they compliment each other
complementary goods
27
good 1: price ↓ good 2: demand ↓ good 1: price ↑ good 2: demand ↑
change in price of related goods and services (substitute goods)
28
good 1: price ↑ good 2: demand ↓ good 1: price ↓ good 2: demand ↑
change in price of related goods and services (complementary goods)
29
you like different things, so you don't buy the things that you used to buy anymore
change in taste and preference
30
anticipated increase in future price of basic commodity increases demand now
change in expectations
31
expected increase in future income will increase willingness to spend current savings
change in expectations
32
level and distribution of population among demographic groups affect demand
change in number of buyers
33
responsiveness of demand to own price
price elasticity
34
> 1
elastic
35
< 1
inelastic
36
= 1
unitary
37
responsiveness of demand to change in price of other goods
cross elasticity
38
responsiveness of demand to change in consumer income
income elasticity
39
midpoint method
(Q2 - Q1) ÷ (Q2 + Q1)/2 (P2 - P1) ÷ (P2 + P1)/2
40
TR method
Q₁ * TR₁ Q₂ * TR₂
41
TR ↓
elastic
42
TR ↑
inelastic
43
TR =
unitary