Econ Vocab 4 Flashcards
Demand
The desire to have some good or service and the ability to pay for it.
Law of Demand
States that when the price of a good or service falls, consumers buy more of it.
Demand Schedule
a table that shows how much of a good or service an individual consumer is willing and able to purchase at each price in a market
Market Demand Schedule
shows how much of a good or service all consumers are willing and able to purchase at each price in a market
Demand Curve
a graph that shows how much of a good or service an individual will buy at each price
Market Demand Curve
a graph that shows all consumers are willing and able to buy at each price
Law of Diminishing Marginal Utility
The marginal benefit from using each additional unit of a good or service during a given time period tends to decline as each is used.
Income effect
the term used for a change in the amount of a product that a consumer will buy because the purchase
Substitution effect
React to a change in the price of a good or service by buying a substitute product - one whose price has not changed and that offers a better relative value.
Change in Quantity demanded
a change in the amount of a product that consumers will buy because of a change in price
Change in Demand
occurs when a change in the marketplace such as high unemployment prompts consumers to buy different amounts of a good or service at every price.
Normal goods
goods that consumers demand more of when their incomes rise.
Inferior goods
goods that consumers demand less of when their incomes rise.
substitutes
Goods and services that can be used in place of other goods and services to satisfy consumer wants
Complements
When the use of one product increases the use of another product, the two products are called complements.
