key terms
When people buy more or less products for various reasons resulting in a change in production of a product. What key term is this...
Change in quantity demanded
Explain change in quantity demanded...
It is when a price change causes more or less of a product to be purchased
You are at a grocery store and normally you buy Honey Nut Cheerios but its October but you see there is a pumpkin flavor Cheerios and you buy those instead. This is an example of...
change in consumer tastes
When a product becomes cheaper, the consumer has more money to purchase the products. This causes them to buy more. What effect is this...
income effect
Explain the income effect...
It is when prices impact how rich the consumer feels causing them to buy more or less
When your family visited a fancy bakery on vacation you only bought 4 donuts, but normally at the grocery store you have no problem buying a whole box. This is an example of...
Income effect
When a product becomes cheaper a consumer is more likely to purchase it over a more expensive product. What effect is this...
the substitution effect
Explain the substitution effect...
It is when the high prices of products cause the consumer to buy a similar, less expensive product
You need a new laptop but instead of buying a Apple Macbook you buy a HP laptop because it is cheaper. This is an example of...
Substitutes
When two products are similar, but different prices they can be...
substitutes
Explain the change in demand...
It is when the amount of products needed changes so producers need to make more
You buy the new Apple phone but now you need a block for your charger. This is an example of...
Complements
When the one product makes you use another product they are...
complements
Explain the difference between substitutes and complements...
Substitutes are products that are similar so if the prices go up the consumer might purchase the other one. Complements are products that are used together so when consumers buy one they need the other.
Normally you try to save up your money but just got a promotion and a raise. Now you don't mind more money on extras like new clothes. This is an example of...
Consumer income impacting demand