Demand-Econ Flashcards
the desire to have a good or service and the ability to pay for it
Demand
The forces of supply and demand establish the price that best serves both
Consumers and Producers
one of the major factors that influences demand
Price
states that when the price of a good or service falls, consumers will buy more
law of demand
Quantity demanded and price have an ____ relationship.
inverse
table that shows how much of a good or service an individual consumer is willing and able to purchase at each price in the market.
demand schedule
how much of a good or service all consumers are willing and able to buy at each price in a market.
Market demand schedule
graph that shows how much of a good or service an individual will buy at each price
Demand Curve
shows the data found in the market demand schedule (how the market is feeling)
-shows how the sum on the info on the individual demand curves of all consumers in a market
market demand curve
marginal benefit of using each additional unit of a products during a given period will decline.
LAW OF DIMINISHING MARGINAL UTILITY
the satisfaction gained from the use of a good or service.
Utility
Economists have identified two patterns of behavior as causes
income effect and the substitution effect.
term used for a change in the amount of a product that a consumer will buy because purchasing power of his/her income changes.
income effect
pattern of behavior that occurs when consumers react to a change in the price of a good or service by buying a substitution products.
substitution effect
A change in the amount of a product that consumers will buy bc of a change in ___ is called a change in the quantity demanded.
price
