Wheeler Ch.4 Test Terms
Terms
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- Income effect
- that portion of change in quantity demanded caused by a change in consumer's real income when the price of product changes
- Demand schedule
- listing showing the quantity demanded at all possible prices that might prevail in the market at a given time
- Demand elasticity
- measure of responsiveness relating chanfe in quantity demanded (dependant variable) to change in price (independent variable)
- Complements
- products that increase the value of other products; products relatinf in such a way that an increase in the price of one reduces the demand for both
- Elasticity
- a measure od responsiveness that tells us how a dependent variable such as quantity responds to a change in an independent variable such as price
- Inelastic
- type of elasticity where the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied)
- Diminishing marginal utility
- decreasing satisfaction or usefulness of additional units of a product are acquired
- Market demand curve
- demand curve that shows the quantities demanded by everyone who is interest in purchasing a product
- Demand curve
- graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time
- Marginal utility
- satisfaction or usefulness obtained from acquiring one more unit of a product
- Demand
- combination of desire, ability, and willingness to produce a product
- Change in quantity demanded
- movement along the demand curve showing that different quanity is purchased in response to a changing price
- Substitutes
- competing products that can be used in place of one another; products related in such a way that an increase of the price of one increases the demand for the other
- Substitution effect
- that portion of a change in quantity demanded due to a change in the relative price of the product
- Change in demand
- consumers demand deferent amounts at every price, causing the demand curve to shirt to the left or the right
- Elastic
- type of elasticity where the percentage change in the independent variable (usually price) causes a more than proportionate change in the dependent variable (usually quantity demanded or supplied)
- Law of demand
- rule stating that more will be demanded at lowe prives and less at higher prices; inverse relationship between price and quantity demanded
- Microeconomics
- branch of economic theory that deals with behavior and decision making by small units such as individuals and firms
- Unit elastic
- elasticity where a change in the independent variable (usually the price) generates a proportional change of the dependent variable (quantity demanded or supplied)