Demand Basics
Study of an economy as a whole
What is macroeconomics?
Demand is contingent on these two variables
What is price and quantity?
The _____ changes but all factors remain the same
What is price?
A measure of responsiveness of __________ to changes in price
What is quantity demanded?
Quantity of a good or service people will buy at a given price
What is demand?
Exact quantity purchased at any given price
What is demand schedule?
Switching to cheaper alternatives
What is substitution effect?
% change in price causing larger % change in quantity demanded
What is demand elastic?
Quantity of a good or service that firms will make available at a given price
What is supply?
Data points from schedule plotted on a graph
What is demand curve?
Prices go down, more money for spending
What is income effect?
Inelastic demand
What is a % change in price causes a relatively smaller % change in the quantity demanded?
Study of behavior of individuals and businesses
What is microeconomics?
Downward curve represents this type of relationship
What is inverse?
Each additional unit brings less satisfaction
What is law of diminishing marginal utility?
% change in price causes an equal % change in quantity demanded
What is unit elastic?
An inverse relationship between price and quantity demanded
What is the law of demand?
Latin words for "other things being equal"
What is ceteris paribus?
When price is constant, 3 other factors affecting demand
What are changes in income, tastes, price for substitutes or compliments, expectations, # of consumers
One of three determinants of elasticity
What is delay, substitutes, income impact?