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American Economy (12th Grade) > Chapter 4 > Flashcards

Chapter 4 Flashcards

1
Q

demand

A

the desire, ability, and willingness to buy a product

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2
Q

Microeconomics

A

deals with behavior and decision making by small units

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3
Q

demand schedule

A

a listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time

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4
Q

demand curve

A

a graph showing the quantity demanded at each and every price that might prevail in the market

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5
Q

Law of Demand

A

quantity demanded varies inversely with price

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6
Q

market demand curve

A

the demand curve that shows the quantities demanded by everyone who is interested in purchasing a product

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7
Q

marginal utility

A

the amount of satisfaction a person gets from consuming one more unit of a product

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8
Q

diminishing marginal utility

A

with succeeding unit someone consumes, the satisfaction decreases

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9
Q

change in quantity demanded

A

people buy a different quantity of a product if that product’s price changes, appearing appearing as a movement along the demand curve

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10
Q

income effect

A

that portion of a change in quantity demanded caused by a change in a consumer’s real income when the price of a product changes

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11
Q

substitution effect

A

that portion of a change in quantity demanded due to a change in the relative price of the product

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12
Q

change in demand

A

consumers demand different amounts at every price, causing the demand curve to shift to the left or the right

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13
Q

substitutes

A

products that can be used in place of other products

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14
Q

complements

A

products that increase the value of other products

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15
Q

elasticity

A

a measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price

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16
Q

demand elasticity

A

the extent to which a change in price causes a change in the quantity demanded

17
Q

elastic demand

A

causes a more than proportionate change in the dependent variable

18
Q

inelastic demand

A

a given change in price causes a relatively smaller change in the quantity demanded

19
Q

unit elastic demand

A

a given change in price causes a proportional change in quantity demanded

20
Q

Determinants of Demand Elasticity (3)

A
  • Ability to postpone a purchase (Yes = elastic, No = inelastic)
  • Substitutes Available (Yes = elastic, No = inelastic)
  • The proportion of income required for the purchase (Yes = elastic, No = inelastic)

American Economy (12th Grade) (19 decks)

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