| A | B |
|---|
| Demand | Amount of good or service a consumer is willing and able to buy atvarious prices |
| Quantity demanded | Amount of good or service a consumer is willing and able to buy at a particular price |
| Law of demand | An increase in a good's price leads to an decrease inquantity demanded |
| Purchasing power | Amount of money people are willing to spend |
| Income effect | An increase or decrease in purchasing power caused by a price change |
| Substitution effect | Tendancy of consumers to purchase similar, lower priced products for more expensive ones |
| Demand curve | Shows the relation between price and quantity demanded in graphic form |
| Demand schedule | Lists quantities of goods consumers are willing and able to buy at various prices. |
| Substitute goods | Lower priced good used to replace similar goods when prices rise |
| Complementary goods | Goods commonly used with other goods |
| Elastic demand | Exists when small changes in a good's price causes a major change in demand |
| Inelastic demand | exists when a change in a good's price causes little change in demand |
