Chapter 4: Demand Flashcards
when the price of a good or service goes up, quantity demanded goes down
when price of good or service goes down, quantity demanded goes up
law of demand
the willingness to buy a good or service and the ability to pay for it
demand
a table the summarizes ONE consumer’s behavior
- lists how much of an item an individual will buy at each price
demand schedule
a table that summarizes ALL consumers’ behavior
- lists how much of an item all consumers will buy at each price
market demand schedule
gathers and evaluates data about individual demand schedule
market research
a graph that shows amount of an item a consumer will buy at each price
demand curve
graphs that shows amount all consumers will buy at each price
market demand curve
marginal benefit of each unit declines as each unit is used
law of diminishing marginal utility
amount people buy changes as purchasing power of their income changes
income effect
amount people buy changes as they buy substitute products
substitution effect
an increase or decrease in the amount demanded because of price change
change in quantity demanded
occurs when something prompts consumers to buy different amounts at every price
change in demand
demanded more when consumers’ income rises
normal goods
demanded less when consumers’ income rises
inferior goods
goods and services that can be used in place of each other
substitutes
