McConnell Brue Macroeconomics 16th ed- Chapter 3
Terms
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- market
- all instutions or mechanisms that bring together buyers(demanders) and sellers(suppliers) of particular goods and services.
- demand schedule
- A hypothetical table that illustrates price vs. demand.
- law of demand
- All else equal; As price falls the quantity demanded rises and as price rises the quantity demanded falls.
- diminishing marginal utility
- In a specific time period, each buy of a product will derive less satisfaction (or benefit) from each successive unit of the product consumed.
- substitution effect
- Suggest that at a lower price buyer's have the incentive to subsititute what is now a less expensive product for similar products that are now realitvely more expensive.
- demand curve
- The inverse relationship between price and quantity demanded for any product, illustrated.
- determinants of demand
- Factors other than price that influence demand.
- normal goods
- Products that demand varies greatly with money income are called superior goods or x.
- inferior goods
- Products that demand varies inversley with money income.
- substitute goods
- one that can be used in place of another good.
- complimentary good
- on that is used together with another good.
- change in demand
- Not to be confused with quantity demanded. A shift of the demand curve. Occurs because the consumers state of mind about purchasing the product has been altered according to a determinant of demand. It is noted by a change in the schedule of demand and a shift in the curve.
- Change in quantity demanded
- A movement from one point to another on the demand curve.