Buy
Is a listing of how much of an item an individual is willing to purchase at each price
Demand Schedule
States that when prices go down, the quantity demanded increases. When prices go up, quantity demanded decreases
Law of demand
Is the willingness to buy a good or service and the ability to pay for it
Demand
Graphically shows the data from a demand schedule
Demand Curve
Is the change in the amount that consumers will buy because the purchasing power of their income changes
Income effect
Is a change in the amount that consumers will buy because they buy substitute goods instead
Substitution effect
Are goods that consumers demand more of when their income rise
Normal goods
Are goods that consumers demand less of when their income rise
Inferior goods
Are goods and services that can be used in place of each other.
Substitues
Are goods that are used together, so a rise in demand for one increases the demand for the other
Complements
Entails applying scientific methods and innovations to production
Technology
Is a tax on the making or selling of certain goods or services
Excise tax
Is a set of rules or laws designed to control business behavior
Regulation
Is a measure of how responsive producers are to price changes in the marketplace
Elasticity of supply
The price at which the quantity demanded and the quantity supplied are equal
Equlibrium price
Is a measure of how responsive consumers are to price changes
Elasticity of demand
Demand is ____ if the quantity demanded changes significantly as price changes
Elastic
Demand is _____ if the quantity demanded changes little as price changes
Inelastic
Is a company’s income from selling its products
Total revenue
The desire and ability to produce and sell a product.
Supply
States that when prices decrease, quantity supplied decreases, and when prices increase, quantity supplied increases.
Law of Supply
Lists how much of a good or service an individual producer is willing and able to offer for sale at each price.
Supply Schedule
Shows the data from a supply schedule in a graph form
Supply Curve
Are the price of the resources used to make products
Input costs
The amount of goods and services that a person can produce in a given time
Labor productivity