Category One
The willingness to buy a good or service, and the ability to pay for it.
What is demand?
This law states that when prices go down, quantities demanded goes up. And when prices go up, quantities demanded goes down.
What is the law of demand?
A listing of how much of an item a single customer is willing to purchase at each price.
What is a demand schedule?
The demand schedule is used to create this?
What is a demand curve?
A listing of how much an entire market is willing to purchase at each price.
What is a market demand schedule?
This graphically shows the results from the market demand schedule.
What is a market demand curve?
This law states that as you keep using more and more of a product, your satisfaction decreases?
What is the Law of Diminishing Marginal Utility?
The change in the amount consumers buy because the purchasing power of their income changes.
What is the income effect?
The change in amount consumers will buy because they buy substitute goods instead.
What is the substitution effect?
An increase or decrease in the amount demanded because of the change in price.
What is change in quantity demanded?
Occurs when something causes consumers to buy different amounts at every price. It causes the demand curve to shift.
What is change in demand?
Goods that consumers demand more of when their income increases.
What are normal goods?
Goods that consumers demand less of when their income increases.
What are inferior goods?
Goods and services that can be used in place of each other.
What are substitutes?
Goods that are used together, so a rise in demand for one causes a rise in demand for the other.
What is a complement?
A measure of how responsive consumers are to price change.
What is Elasticity of Demand?
The quantity demanded changes significantly as price changes.
What is elastic?
The quantity demanded changes very little as prices change.
What is inelastic?
When the percentage change in price is the same as the percentage change in quantity.
What is unit elastic?
The company's income from selling its products.
What is total revenue?
A method of measuring elasticity by measuring total revenues.
What is the total revenue test?
Ice cream is an example of this because if the price changes dramatically, you are most likely to buy more or less of it.
What is a luxury?
Insulin is an example of this as diabetics need it the same despite a rise in prices.
What is a necessity?
A growing market or a shrinking market can change demand. The associated vocabulary term for this factor that causes a change in demand is referred to as_____________.
What is market size?
When you expect prices to change in the future, this can influence your buying habits today. The correct vocabulary term for this phenomena is referred to as________________.
What are consumer expectations?