Fundamentals of Demand
Shifts in Demand
Elasticity of Demand
Important Vocab.
Demand Graphs
100
This says that when price is higher quantity demanded will be lower and when price is lower quantity demanded will be higher.
What is the law of demand?
100
This type of change will never shift the demand curve.
What is price?
100
Elasticity of demand is about how consumers respond to changes in this.
What is price?
100
If you purchase a candy bar because the price of your favorite type has gone up and you're unwilling to pay it, then you've purchased one of these.
What is a substitute?
100
This is what we label the two axes in a demand graph.
What are price and quantity?
200
This is the amount people are willing to buy at a given price.
What is quantity demanded?
200
All the things that cause the demand curve to shift are collectively called this.
What are non-price determinants?
200
This is the term to describe goods whose elasticity of demand is equal to one.
What is unitary elastic?
200
This is what we call goods that are purchased separately but used in conjunction with each other.
What are complements?
200
This will always slope downward.
What is the demand curve?
300
This takes place when a consumer reacts to a price increase of one good by consuming less of that good and more of a similar good.
What is the substitution effect?
300
Demand falling for a type of shoe because people no longer like it would be considered this type of change.
What is consumer tastes?
300
This is the formula for calculating elasticity.
300
These are goods you would no longer purchase if your income raises because now you can afford something better.
What are inferior goods?
300
When demand increases at any price this happens to the demand curve.
What is a rightward shift?
400
This explains why you might have to decrease the amount of goods you purchase even if your paycheck or allowance doesn't change.
What is the income effect?
400
In summer of 2022, the demand for houses in Southern California changed because of a change in price for this related good.
What are mortgage loans (or mortgage interest rates)?
400
These are goods whose quantity demanded changes at a higher percentage than a price change.
What are goods with elastic demand?
400
This is at the end of the law of demand. It means that all other things remain unchanged.
What is ceteris peribus?
400
White Board Question: This is what a graph that describes a decrease in demand looks like.
500
A seller can use this to determine what is the most profitable price to charge for his/her product.
What is a market demand schedule?
500
If consumers expect the price of a good to rise in the future, then the current demand will do this.
What is increase (or shift right)?
500
Because they sell necessities, these types of firms must get government approval to increase prices.
What are public utilities?
500
This table shows how much one consumer is willing to pay for a good at various prices.
What is an individual demand schedule?
500
This is the orientation of demand curves for goods that have elastic demand.
What is shallow or flat?