Chapter 4 Study Guide Flashcards
For most products and services, increased price results in _____
Demand for fewer products
An increase in the price of milk causes a decrease in the demand for cereal. The two products are _____
Complements
Advertising, fashion trends, and new product introductions serve to _____
Create consumer demand
Because a modest price increase has little to no effect, the demand for the product is _____
Inelastic
When a business doubled the price of a product in order to increase profits, then a dramatic decline in revenues demonstrated the _____ of the product
Elasticity
A demand schedule shows _____
A listing of the various quantities demanded of a particular product at all prices that mights prevail in the market
Consumers’ willingness to replace a costly item with a less costly item is an example of _____
The Substitution Effect
An increase in the price of cameras results in a decrease in the demand of film. The two products are _____
Complements
When a customer’s need for a product is not urgent, demand tends to be _____
Elastic
When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost exactly 30%. Demand for the product is _____
Unit Elastic
_____ is the desire, ability, and willingness to buy a product
Demand
_____ is the extra usefulness gained from using one more unit of a product
Marginal Utility
_____ is the listing that shows quantities demanded of a product at all prices
Demand Schedule
_____ is the measure of responsiveness that show show a dependent variable responds to a change in an independent variable
Elasticity
_____ are products used in place of other products
Substitutes
_____ describes change in demand when a change in price causes a relatively larger change in quantity demanded
Elastic
_____ is a field of economics that deals with behavior and decision making by small units
Microeconomics
_____ is the given change in price that causes a proportional change in quantity demanded
Unit Elastic
_____ is the movement along the demand curve
Change in Quantity Demanded
_____ is the change in quantity demanded due to a relative change in price
Substitution Effect
_____ is the graph showing the quantity demanded at every price
Demand Curve
_____ is the willingness to buy more or less of a product at the same price
Change in Demand
_____ is when the quantity demanded of a product varies inversely with its price
Law of Demand
_____ are products where the use of one product increases with the other
Complements
_____ illustrates the demand of everyone interested in purchasing a product
Market Demand Curve
_____ is the extent to which a change in price causes a change in demand
Demand Elasticity
_____ is the study of economic behavior of individuals and firms
Microeconomics
_____ describes a given change in price that causes a relatively smaller change in quantity demanded
Inelastic
_____ is the decline in extra satisfaction from using additional quantities of a product
Diminishing Marginal Utility
_____ is the change in quantity demanded because a price change altered consumer’s real income
Income Effect
