Ch 3 - Demand 

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14 Terms

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Complements
________: goods which have a joint demand as they enhance the satisfaction derived from another good.
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Substitutes
________: alternative goods can satisfy the same want and need.
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price availability
A change in the ________ of either will have an effect on the demand for complementary goods.
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Status quo
________: overwhelming amount of choices.
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Demand
________: the quantity of a product which consumers are willing and able to buy.
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Complementary goods
________: demand decreases, quality demand decreases.
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Substitute goods
________: demand increases, quality demanded decreases.
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rationality
Bounded ________: theory that consumers have limited rational decision making driven by cognitive ability, time constraint, and imperfect information.
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Effective demand
________: by purchasing power, the purchaser has the money to pay for the product.
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**Ineffective demand** 
do not have purchasing power
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**Law of demand**
states that as the price of product falls, the quantity demanded will increase
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**PINTE**

1. Prices   2. Income   3. Number of buyers    4. Taste/preference  5. Expectations
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Methods of decreasing demand
* Income drops 
* Substitution falls 
* Compliments rises 
* Buying discouraged
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Methods of increasing demand
* Income rises (normal goods) 
* Price of substitution rises 
* Price of complementary falls 
* Encouraged buying 
* Population likely to buy increases