Vocab Wk2 Flashcards
Change in Demand
When a change in some economic factor (other than price) causes a different quantity to be demanded at every price.
Change in Quantity Demanded
When the price of a good or service changes and it induces a change in the amount of the good or service being demanded; a movement along a demand curve.
Change in Quantity Supplied
When the price of a good or service changes and it induces a change in the amount of the good or service being supplied; a movement along a supply curve.
Change in Supply
When a change in some economic factor (other than price) causes a different quantity to be supplied at every price.
Complements
Goods that are often used together so that consumption of one good tends to enhance consumption of the other.
Demand Shifters
A change in an economic factor that is not the price, this creates a change in demand.
Elasticity
An economics concept that measures responsiveness of one variable to changes in another variable.
Equilibrium Quantity
The quantity at which quantity demanded and quantity supplied are equal for a certain price level.
Inelastic
When the percentage change in quantity is less than the percentage change in the price of the good or service.
Inferior Goods
A good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls.
Law of Demand
The common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant.
Law of Supply
The common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant.
Normal Goods
A good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls.
Price Elasticity of Demand
Percentage change in the quantity demanded of a good or service divided the percentage change in price.
Substitutes
A good that can replace another to some extent, so that greater consumption of one good can mean less of the other.
