Economics: Chapter 4.1-4.2

Question 0

Substitution Effect

Answer 0

When the price of a good increases, consumers will buy more of another good

Question 1

Law of Demand

Answer 1

When a goods price is lower, consumers will buy more of it

Question 2

Income effect

Answer 2

The change in consumption caused by a change in purchasing power of the consumer

Question 3

Demand schedule

Answer 3

Table that lists the quantities of a good a person will buy at each price

Question 4

Market demand schedule

Answer 4

Table that lists the quantities of a good demanded by all consumers of a market at each price

Question 5

Demand

Answer 5

The desire to own something and the ability to pay for it

Question 6

Ceteris paribus

Answer 6

All other things held constant, the assumption that nothing besides the price will change

Question 7

Normal goods

Answer 7

Goods whose demand increases as consumer income increases

Question 8

Inferior goods

Answer 8

Goods whose demand falls as consumer income increases

Question 9

Complements

Answer 9

Goods that are bought and used together, direct relationship

Question 10

Substitutes

Answer 10

Goods that are used in place of one another, inverse relationship

Question 11

5 things that causes a shift in the demand curve

Answer 11

1) Change in income
2) Change in consumer expectations
3) Change in population
4 Change in consumer tastes and advertising
5) Change in price of related goods