Chapter 4 Flashcards
(32 cards)
the quantity of consumers are both willing and able to buy at each price during a given time period, other things constant
demand
the quantity of a good that consumers are willing and able to buy per period relates inversely, or negatively, to the price, other things constant
law of demand
when the price of a good falls, the good becomes cheaper compared to other goods so consumers tend to substitute that good for other goods
the substitution effect of a price change
the number of dollars a person receives per period, such as $400 per week
money income
income measured in terms of the goods and services it can buy
real income
the amount of a good consumers are willing to and able to buy per period at a particular price, as reflected by a point on the demand curve
quantity demanded
a curve showing the relation between the price of a good and the quantity consumers are willing to and are able to buy per period, other things constant
demand curve
the relation between the price of a good and the quantity purchased by an individual consumer per period, other things constant
individual demand
the relation between the price of a good and the quantity purchased by all consumers in the market during a given period, other things constant
market demand
a good, such as new clothes, for which demand increases, or shifts rightward, as consumer income rises
normal good
a good, such as used clothes, for which demand decreases, or shifts leftward, as consumer income rises
inferior good
goods, such as tacos and pizza, that relate in such a way that an increase in the price of one shifts the demand for the other righward
substitute
goods, such as pizza and Pepsi, that relate; an increase in the price of one shifts the demand for the other leftward
complements
consumer preferences; likes and dislikes in consumption; assumed to remain constant along a given demand curve
tastes
change in quantity demanded resulting from a change in the price of the good, other things constant
movement along a demand curve
movement of a demand curve right or left resulting from a change in one of the determinants of demand other than the price of the good
shift of a demand curve
a relation between the price of a good and the quantity that producers are willing and able to sell per period, other things constant
supply
the amount of a good and the quantity that producers are willing and able to sell per period is usually directly related to its price, other things constant
law of supply
a curve showing the relation between the price of a good and the quantity producers are will and able to sell per period, other things constant
supply curve
refers to a particular amount offered for sale at a particular price, as reflected by a point on a given supply curve
quantity supplied
supply of an individual producer; the relation between the price of a good and the quantity and individual producer is willing and able to sell per period, other things constant
individual supply
the sum of individual supplies of all producers in the market
market supply
change in quantity supplied resulting from a change in the price of a good, other things constant
movement along the supply curve
movement left or right resulting from a change in of the determinants of supply other than the price of a good
shift of a supply curve
