Economics CH 4

demand

combination of quantities that someone would be willing and able to buy over a range of possible prices at a given moment

Microeconomics

branch of economic theory that deals with behavior and decision making by small units such as individuals and firms

demand schedule

listing showing the quantity demanded at all possible prices that might prevail in the market at a given time

prevail

to predominate

incentive

something that motivates

demand curve

graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time

law of demand

rule stating that more will be demanded at lower prices and less at higher prices; inverse relationship between price and quantity demanded

inversely

in the opposite way

market demand curve

demand curve that shows the quantity demanded by everyone who is interested in purchasing a product

marginal utility

additional satisfaction or usefulness obtained from acquiring or consuming one more unit of a product

diminishing marginal utility

Decreasing satisfaction or usefulness as additional units of a product are acquired

change in quantity demanded

movement along the demand curve showing that a different quantity is purchased in response to a change in price

principle

a fundamental basic law or idea

income effect

the portion of a change in quantity demanded caused by a change in a consumer's real income when the price of a product changes

substitution effect

the portion of a change in quantity demanded that is due to a change in the relative price of the good

illustrated

show something with pictures

change in demand

different amounts of a product are demanded at every price, causing the demand curve to shift to the left or the right

substitutes

competing products that can be used in place of one another

complements

products that increase the use of other products; products related in such a way that an increase in the price of one reduces the demand for both

Elasticity

a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants

demand elasticity

the extent to which a change in price causes a change in the quantity demanded

elastic

type of elasticity in which a change in the independent variable (usually price) results in a larger change in the dependent variable (usually quantity demanded or supplied)

Inelastic

case of demand elasticity where the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied)

unit elastic

elasticity where a change in the independent variable (usually price) generates a proportional change of the dependent variable (quantity demanded or supplied)

technical

related to a particular subject, field, profession, or trade

adequate

enough, sufficient

Detemaniat

Are their any subsistutes

Can these items be delayed

does it use a large part of income