Demand Economics Vocabulary

When prices go down, quantity demanded increases. When prices go up, quantity demanded decreases.

• Law of Demand

• Demand

A graph that shows how much of a good or service an individual will buy at each price.

• demand curve

• demand schedule

A table showing how much of an item an individual is willing to purchase at each price.

• substitution effect

• income effect

• demand curve

• demand schedule

The willingness to buy a good or service and the ability to pay for it.

• Law of Demand

• Demand

Goods that consumers demand more of when their incomes rise.

• Income Effect

• normal goods

• inferior goods

• complements

Goods that consumers demand less of when their incomes rise.

• normal goods

• inferior goods

• substitutes

• complements

Goods and services that can be used in place of each other.

• normal goods

• inferior goods

• substitutes

• complements

Goods that are used together, so a rise in demand for one increases the demand for the other.

• normal goods

• inferior goods

• substitutes

• complements

The change in the amount that consumers will buy because the purchasing power of their income changes.

• income effect

• substitution effect

• change in demand

• normal goods

Term describing demand when the quantity demanded CHANGES LITTLE as price changes.

• elastic

• inelastic