| A | B |
|---|
| Complements | Products that tend to be used together |
| Curve shifts right | Response of demand curve to an increase in demand |
| Curve shifts left | Response of demand curve to a decrease in demand |
| Decrease the price of product | Results in a change in the quantity demanded |
| Demand | The desire, ability, and willingness to buy a product |
| Demand curve | Graph showing the quantity demanded at each and every price at a given time |
| Demand elasticity | The extent to which a change in price causes a change in the quantity demanded |
| Diminishing marginal utility | The decrease in satisfaction or usefulness received from each additional unit of a product |
| Diminishing marginal utility | Buying only one instead of two candy bars |
| Elastic demand | When a change in price causes a large change in demand |
| Elastic demand | Stereo equipment has this type of demand |
| Elasticity | A measure of how sensitive consumers are to price changes |
| Income effect | A change in quantity demanded due to people having more to spend |
| Increase the price of product | Would result in a change in the quantity demanded |
| Inelastic demand | When a change in price causes a small change in demand |
| Inelastic demand | Price decreases 10%, company's revenues fall more than 10% |
| Inelastic demand | A physician's services |
| Inelastic demand | Prescription drugs |
| Law of Demand | More will be purchased at low prices than high prices |
| Marginal utility | The extra usefulness a person gets from one more unit of a product |
| Microeconomics | Area of economics that deals with behavior of small units |
| Price | Stays the same if a change in demand |
| Substitutes | Products that can be used in place of other products |
| Substitution effect | A change in quantity demanded due to people substituting one product for another |
| Total expenditures | Determined by multiplying the price of a product by quantity demanded |
| Unit elastic | When a change in price causes a proportional change in demand |
