Economics - Chapter 4 Review

Demand Schedule

• A listing showing the quantity demanded at all possible prices that might prevail in a market at a given time.
• The change in quantity demanded because of a shift in relative prices, leading consumers to replace more costly items with less costly ones.
• Additional satisfaction or usefulness obtained from acquiring or consuming one or more units of a product.
• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.

Demand Curve

• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.
• Rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded.
• A graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.
• Additional satisfaction or usefulness obtained from acquiring or consuming one or more units of a product.

Law of Demand

• A graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.
• Additional satisfaction or usefulness obtained from acquiring or consuming one or more units of a product.
• Rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded.
• Demand is elastic when a change in price causes a relatively larger change in quantity demanded.

Marginal Utility

• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.
• Additional satisfaction or usefulness obtained from acquiring or consuming one or more units of a product.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.
• The change in quantity demanded because of a change in price that alters consumers’ income.

Income Effect

• The change in quantity demanded because of a shift in relative prices, leading consumers to replace more costly items with less costly ones.
• The change in quantity demanded because of a change in price that alters consumers’ income.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.
• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.

Substitution Effect

• The change in quantity demanded because of a shift in relative prices, leading consumers to replace more costly items with less costly ones.
• A graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time.
• Demand is inelastic when a given change in price causes a relatively smaller change in quantity demanded.
• Goods that are related such that an increase in the price of one leads to a decrease in the demand for the other.

Change in Demand

• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.
• A listing showing the quantity demanded at all possible prices that might prevail in a market at a given time.
• Goods that are related such that an increase in the price of one leads to a decrease in the demand for the other.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.

Complementary Goods

• The change in quantity demanded because of a change in price that alters consumers’ income.
• Demand is elastic when a change in price causes a relatively larger change in quantity demanded.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.
• Goods that are related such that an increase in the price of one leads to a decrease in the demand for the other.

Elastic Demand

• Rule stating that more will be demanded at lower prices and less at higher prices; an inverse relationship between price and quantity demanded.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.
• Demand is elastic when a change in price causes a relatively larger change in quantity demanded.
• The change in quantity demanded because of a change in price that alters consumers’ income.

Inelastic Demand

• Demand is inelastic when a given change in price causes a relatively smaller change in quantity demanded.
• Changes in consumer income, tastes, the price of substitutes, expectations, and the number of consumers.
• The change in quantity demanded because of a change in price that alters consumers’ income.
• Different amounts of a product are demanded at every price, causing the demand curve to shift to the left or right.