Unit 2-2: Supply, Demand, and Consumer Choice

Flashcards covering key vocabulary from Unit 2: Supply, Demand, and Consumer Choice.

Shift in Demand

A change in demand occurs when a good's demand increases or decreases at every price point, resulting in the entire demand curve shifting.

Normal Goods

Goods for which demand increases as consumer income rises.

Inferior Goods

Goods for which demand increases when consumer income falls.

Complements

Goods that are used together, where an increase in the price of one leads to a decrease in the demand for the other.

Substitutes

Goods that can be used in place of one another, where an increase in the price of one leads to an increase in the demand for the other.

Market Demand

The total quantity of a good that all consumers are willing and able to purchase at various prices.

Determinants of Demand

Factors that cause the demand curve to shift, such as consumer preferences, number of consumers, prices of related goods, consumer income, and expectations about the future.

Consumer Choice

The decision made by consumers regarding which goods and services to purchase based on their preferences, income, and the prices of those goods.