Demand & Supply : 2/16/16 Flashcards
The forces of s_____ and d______ establish the p____ that best serves both producers and consumers.
Supply, demand, price
D______ is the desire to have a good or service and the ability to pay for it.
Demand
P___ is one of the major factors that influences demand.
Price
The l__ __ d_____ states that when the price of a good or service falls, consumers will buy more of it.
Law of demand
As the p____ of a good or service increases, consumers usually buy ___ of it.
Price, less
Q______ d_________ and p____ have an i______ r__________.
Quantity demanded, price, inverse relationship
A d_______ s_______ is a 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
A m______ d______ s________ shows how much of a good or service all consumers are willing and able to buy at each price in a market.
Market demand schedule
The ____-hand column of the table lists various _____ of a good/service.
Left, prices
The ____-hand column shows the ________ ________ of the good/service at each price.
Right, quantity demanded
A d_____ c____ is a graph that shows how much of a good or service an individual will buy at each price.
Demand curve
The d_____ c_____ should slope d________ from the u____ ___ to the l_____ ____.
Demand curve, downward, upper left, lower right
A m______ d_______ c_____ shows the data found in the market demand schedule.
Market demand curve
A m_____ d_____ c_____ shows the sum of the information on the individual demand curves of all consumers in a market.
Market demand curve
The v_______ axis displays p_____ and the h__________ axis displays q________ d_______.
Vertical, prices, horizontal, quantities demanded
The l____ of d_________ m________ u_____ states that the marginal benefit of using each additional unit of a product during a given period will decline. That u______ is the satisfaction gained from the use of a good or service.
Law of diminishing marginal utility, utility
Economists have identified two patterns of behavior as causes : the i______ e_____ and the s_________ e____.
Income effect, substitution effect
The i_____ e_____ is the 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
The s____________ e____ is the pattern of behavior that occurs when consumers react to change in the price of a good or service by buying a substitute product.
Substitution effect
A change in the amount of a product that consumers will buy because of a change in price is called a c_____ in the q______ d________.
Change in the quantity demanded
Each change in q_______ d__________ is shown by a new p____ on the d_____ c____.
Quantity demanded, point, demand curve
C_____ in demand is also called a s____ in demand because it actually shifts the position of the demand curve.
Change, shift
Six factors can cause change in demand : i_____, m_____ s___, c_______ t______, c_______ e_________, s________ g____, and c____________ g_____.
Income, market size, consumer tastes, consumer expectations, substitute goods, complementary goods
Changes in income also affect m_____ d______ c_____.
Market demand curves
When the i______ of most consumers in a market rise or fall, the t_____ d______ in that market also usually rises or falls.
Incomes, total demand
N_____ g_____ are goods that consumers demand more of when their incomes rise.
Normal goods
I_______ g____ are goods that consumers demand less of when their incomes rise.
Inferior goods
I______ g____ are used books and generic food products.
Inferior goods
A_________ has a strong influence on consumer tastes.
Advertising
Your expectations for the f_____ can affect your b_____ h____ today.
Future, buying habits
Goods and services that can be used in places of other goods and services to satisfy consumer wants are called s__________.
Substitutes
Economists use the term e________ of _______ to describe how responsive consumers are to price changes in the marketplace.
Elasticity of demand
Demand is ______ when a change in price, either up or down, leads to a relatively larger change in the quantity demanded.
Elastic
Demand is _______ when a change in price leads to a relatively smaller change in the quantity demanded.
Inelastic
Elastic goods and services are often said to be p____ s________.
Price sensitive
In the case of i______ demand, changes in price have little impact on the q______ d________.
Inelastic, quantity demanded
Goods that have a larger number of s_________ fall into the e______ category.
Substitutes, elastic
_______ though, is ________ because the quantity demanded remains relatively constant.
Insulin, inelastic
The ______ demand curve has a steeper slope than the _______ demand curve does.
Inelastic, elastic
Demand is said to be ___ ______ when the percentage change in price and quantity demanded are the same.
Unit elastic
No good or service is ever really ___ ______.
Unit elastic
Three things determine elasticity. : 1. S_______ g____ or s_____. 2. P_______ of i______. 3. N_______ vs l_______.
Substitute goods or services, proportion of income, necessities vs luxuries
If there are no substitutes for a good or service, demand for it tends to be _______.
Inelastic
The p________ of your i______ that you _____ on a good or service is another factor that affect _______.
Percentage, income, spend, elasticity
At the same time, demand for products that cost little of your income tends to be _______.
Inelastic
A n________ is something you must have, such as food or water.
Necessity
The change in quantity demanded is smaller than the change in price, so demand is ______.
Inelastic
A ______ is something that you desire but that is not essential to your life, such as a plasma television.
Luxury
Demand for luxuries tends to be ______.
Elastic
