| A | B |
|---|
| free market economy | 3 econ ?? based on voluntary exchange |
| demand | desire to own something and ability to pay |
| substitution effect | price up, buy something else |
| income effect | price up, real income down |
| demand schedule | quantity individual will buy at certain price |
| market demand schedule | quantity all consumers will buy |
| demand curve | graph shows demand schedule |
| ceteris paribus | all other things held constant |
| normal goods | income up, want more of |
| inferior good | income up, want less of |
| demographics | statistical characteristics of pop. |
| complements | goods bought and used together |
| substitutes | goods used in place of one another |
| elasticity of demand | measure of how consumers respond to price change |
| inelastic | demand not sensitive to price change |
| elastic | demand VERY sensitive to price |
| unitary elastic | % change in quantity = % change in price |
| total revenue | total $ co. receives selling goods, services |
| law of demand | price of pizza up, demand down |
| substitution | pizza price up, eat taco instead |
| income effect | price of pizza up, buy less of everything |
| hot dogs and hot dog buns | complements |
| take the bus instead of plane | substitutes |
| you HAVE to have it, drinking water | demand is inelastic |
| luxuries like expensive jewelry | demand is elastic |
| Instant noodles instead of gourmet noodles | inferior goods |
| CDs are 1/2 price! | demand goes up |
| price of CDs doubles | demand goes down |
