Demand & Supply Flashcards
The forces of ______ and ______ establish the price that best serves both producers and consumers
supply, demand
______ is the desire to have a good or service and the ability to pay for it
Demand
_____ is one of the major factors that influences demand
Price
The ___ __ ______ states that when the price of a good or service falls, consumers will buy more of it
law of demand
As the price of a good or service _________, consumers usually buy less of it
increases
Quantity demanded and price have an _______ ____________
inverse relationship
A ______ ________ 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 ______ ______ ________ 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 ____-____ column of the table lists various prices of a good/service
left-hand
The _____-____ column shows the quantity demanded of the good/service at each price
right-hand
A ______ _____ is a graph that shows how much of a good or service an individual will buy at each price
demand curve
The ______ _____ should slope downward from the upper left to lower right
demand curve
A ______ ______ _____ shows the data found in the market demand schedule
market demand curve
A ______ ______ _____ shows the sum of the information on the individual demand curves of all consumers in a market
market demand curve
The vertical axis displays ______ and the horizontal axis displays __________ ________
prices, quantities demanded
The ___ __ ___________ ________ _______ states that the marginal benefit of using each additional unit of a product during a given period will decline
law of diminishing marginal utility
Recall that _______ is the satisfaction gained from the use of a good or service
utility
Economists have identified two patterns of behavior as causes: the ______ effect and the ____________ effect
income, substitution
The ______ ______ 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 - you feel richer b/c you save money
income effect
The ____________ ______ is the pattern of behavior that occurs when consumers react to a 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 the _____ is called a change in the quantity demanded
price
Each change in ________ ________ is shown by a new point on the demand curve
quantity demanded