Demand 3.1-4 Flashcards
What are substitute goods?
Goods that can be purchased instead of the original good because they satisfy the same needs
What are complementary goods?
Goods that are closely related to the original and used with the original goods.
What is a normal good?
A good characterized by rising consumption when a consumer’s income
rises.
What is an inferior good?
A good characterized by falling consumption falls when a consumer’s
income rises.
How does consumer demand respond to a change in price?
The change is reflected in movement along the demand curve
How does consumer demand respond to a change in a variable?
The change is reflected in a new demand curve that is shifted
If the price of a substitute good increases what happens to the demand of the original product?
The demand of the original product would increase
Would a change in price of a substitute good cause a shift or movement in the demand curve?
This change is a change in demand;
the demand curve shifts.
If the price of cheese falls what will happen to the demand of bread?
The demand of bread will increase because it is a complement to cheese
Does the demand curve shift inward or outward for a normal good when a consumer’s income increases?
The demand curve for a normal good shifts outward when a consumer’s income increases
What happens to the demand curve for a normal good when a consumer’s income decreases?
It shifts inward when a consumer’s income decreases
In what direction does the demand curve shift for an inferior good when a consumer’s income increases?
The demand curve shifts in when income increases
In what direction does the demand curve shift for an inferior good when a consumer’s income decreases?
The demand curve shifts out when income decreases
