Chapter 3 Vocab Quiz

The desire to own something and the ability to pay for it

• Demand

• Law of demand

• Substitution effect

• Income effect

Consumers will buy more of a good when its price is lower and less when its price is higher

• Demand

• Law of demand

• Substitution effect

• Income effect

Takes place when a consumer reacts to a rise in the price of one good by consuming less of that good and more of a substitute good.

• Demand

• Law of demand

• Substitution effect

• Income effect

The change in consumption that results when a price increase causes real income to decline

• Demand

• Law of demand

• Substitution effect

• Income effect

A table that lists the quantity of a good that a person will purchase at various prices in a market

• Demand schedule

• Market demand schedule

• Demand curve

• Ceteris paribus

A table that lists the quantity of a good all consumers in a market will buy at each different price

• Demand schedule

• Market demand schedule

• Demand curve

• Ceteris paribus

Graphic representation of a demand schedule

• Demand schedule

• Market demand schedule

• Demand curve

• Ceteris paribus

Latin phrase for “all other things held constant”

• Demand schedule

• Market demand schedule

• Demand curve

• Ceteris paribus

Goods that consumers demand more of when their income increases

• Normal good

• Inferior good

• Demographics

• Complements

Goods that you buy in smaller quantities or not at all

• Normal good

• Inferior good

• Demographics

• Complements