Terms 1
What is supply?
The desire to own something AND have the ability to pay for it.
What is demand?
If you buy fewer of your favorite item, without increasing your spending on other items, this is known as...
What is the income effect?
These are goods that you would buy in smaller quantities, or not at all, if your income were to rise and you could afford something better.
What are inferior goods or knock offs?
These are goods that consumers demand more of when their incomes increase.
What are normal goods?
This is a graphic representation of a demand schedule.
What is a demand curve?
Sometimes, increases or decreases in demand are not connected to the price.
What is the change of demand?
If you buy less of something after a small increase...
What is elastic?
Describes how much of a good or service a producer is willing and able to sell at a specific price.
What is quantity supplied?
Please define what the law of supply says.
What is producers will offer more of a good as its price increases and less as its price falls?
This takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good.
What is the substitution effect?
If you buy the same amount or just a little less of a good after a large price increase, or relatively unresponsive to price changes.
What is inelastic?
This would help a pizza owner predict and prepare for how many pizzas they will most likely sell.
What is a market demand schedule?
This is the definition of elasticity of demand.
What is economists describe the way that consumers respond to price changes?
This measures how firms will respond to changes in the price of a good or service.
What is time?
This is a table that lists the quantity of a good that a person will purchase at various prices in a market.
What is a demand schedule?
When a grocery store puts a popular item, like apples, on sale for a lower price, more people are likely to buy them. The reduced cost makes the apples more appealing, increasing the quantity of apples purchased.
What is the law of demand in action?
When Apple releases a new iPhone, high consumer demand can lead to high prices and temporary shortages.
What is the law of supply in action?
Higher income generally increases overall spending, shifts spending from basic necessities to discretionary spending on luxuries, and other types of goods purchased
What is when higher income effects our spending habits?
These include income, consumer expectations, population demographics, and consumer tastes and advertising.
What are examples of non-price determinants?
Shows the quantities demanded at various prices by all consumers in the market.
What is the market demand schedule?
Goods that you would buy in smaller quantities, or not at all, if your income were to rise and you could afford something better.
What are inferior goods?
Economists describe the way that consumers respond to price changes as this.
What is the elasticity of demand?
This says that when a good’s price is lower, consumers will buy more of it. When the price is higher, consumers will buy less of it.
What is the law of demand?
This shows the relationship between price and quantity supplied for a specific good or service, or how much a good or service a supplier will offer at various prices.
What is the supply schedule?