Economics Unit 2 Vocabulary

Front

Willingness and ability of consumers to purchase a good or service at a given price

Back

Demand

Front

Which branch of economics studies the behavior of individuals and firms in making decisions regarding the allocation of resources?

Back

Microeconomics

Front

What is the term for a factor that motivates individuals to perform an action?

Back

Incentive

Front

What is the graphical representation of the relationship between the price of a good and the quantity demanded?

Back

Demand Curve

Front

Which law states that, all else being equal, as the price of a product increases, quantity demanded decreases?

Back

Law of Demand

Front

What is the additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service?

Back

Marginal Utility

Front

What effect describes the change in consumption resulting from a change in real income?

Back

Income Effect

Front

What effect occurs when consumers replace a more expensive item with a less expensive alternative?

Back

Substitution Effect

Front

What term describes the measure of how much the quantity demanded of a good responds to a change in price?

Back

Elasticity

Front

What is the term for the total amount of a specific good or service that is available to consumers?

Back

Supply