Ch. 3 Vocab Flashcards
the amount of a good or service that consumers are willing and able to buy at various prices during a given period
demand
the amount of a good or service that consumers are willing and able to purchase at a particular price
quantity demanded
the principle that all other factors being equal, consumers will purchase (demand) more of a good at lower prices and less of a good at higher prices
law of demand
the amount of income that people have available to spend on goods and services
purchasing power
consumers’ tendency to substitute a lower-priced good for a similar, higher priced one
substitution effect
the effect that a change in an item’s price has on summers’ ability to purchase goods
income effect
the natural decreases in the utility of a good or service as more units of it are confused
diminishing marginal utility
a table that slows the level of demand for a particular item at various prices
demand schedule
a graphic representation of a demand schedule showing the relationship between the price of an item and the quantity demanded during a given period with all other things being equal
demand curve
a nonprime factor that influencers that available supply of a good or service
determinants of demand
a product that purchasers use in place of another product particularly if the price of the other product rises
substitute goods
a good that is commonly used with another good and for which demand increases (or decreases) when the demand for the related good increases
complementary goods
the degree to which changes in the price of a good or a service affect quantity demanded
elasticity of demand
the situation that exists when quantity demanded changes greatly in response to a change in price
elastic demand
the situation that exists when quantity demanded changes only slightly or not at all in response to a change in price
inelastic demand
