Demand Flashcards
Ceteris Paribus
Everything else remains unchanged except for the price.
Choice
A decision between two or more alternatives.
Complements
Goods or services that are often consumed together.
Compromise
An agreement to settle a conflict in which each side gives up something
Conflict
A disagreement or argument (or the inability to agree)
Consequence
A consequence is the outcome from choosing to do something, or not do something. Consequences can be positive, negative, or neutral.
Consumer
An individual or household that demands a good or service
Consumer spending
The sum of the amount a consumer is spending on a good or service (Price x Quantity)
Demand
The amount of a good or service a consumer is willing and able to buy at a range of prices.
Disposable Income
The income a consumer has to spend after income tax is paid. Income – income tax.
Income
Money received as a result of working, transfer payments or from investments.
Flow-on effect
A change that results from an earlier change in the price of a good or an earlier change in a person’s demand for a good or service.
Inferior goods
Goods that are demanded less when a consumer’s income increases.
Law of Demand
As the price of a good or service increases, the quantity demanded decreases, ceteris paribus, vice versa.
Limited Means
Our personal resources of time, income, skills.
Luxury Good
Goods that are demanded more when there is a significant increase in a consumer’s income (an extreme type of normal good).
Needs
Things that are essential for survival.
Normal Good
Goods that are demanded more when a consumer’s income increases.
Oppurtunity cost
The next best alternative foregone; your second choice you have given up.
