Supply & Demand Flashcards
1
Q
The measure of demand in response to a change in price
A
Price elasticity
2
Q
When the demand does not change in response to price changes
A
Inelastic
3
Q
When the demand changes along with a price change
A
Elastic
4
Q
In theory all items are ________ over the long term
A
Elastic
5
Q
When an increase in price for something causes an increase in demand for another
A
Substitute
6
Q
When a decrease in price for something causes an increase in demand for another
A
Complements
7
Q
The additional benefit received from the consumption of an additional unit
A
Marginal utility
8
Q
As the rate of consumption increases the marginal utility derived from consuming additional units will decline. This in known as ______
A
Diminishing marginal utility
