Card Set Information
ECON Chapter 2
The amount of a good or service consumers are willing and able t opuchase during a given period of time (week, month, etc.)
General Demand Function
The relation between quantity demanded and the six factors that affect quantity demanded: Qd = f(P,M,Pr,T,Pe,N)
What are the six principle variables that influence the quantity demanded of a good or service?
1. the price of the good or service
2. the incomes of consumers
3. the prices of related goods or services
4. the tastes or preference patterns of consumers
5. the expected price of the product in future periods
6.the number of consumers in the market
A good or service for which and increase (decrease) in income causes consumers to demand more (less) of the good, holding all other variables in the general demand function constant.
A good or service for which an increase (decrease) in income causes consumers to demand less (more) of the good, all other factors held constant.
Two goods are substitutes if an increase (decrease) in the price of one of hte goods causes consumers to demand more (less) of the other good, holding all other factors constant.
Two goods are complements if an increase (decrease) in the price of one of the goods causes consumers to dmeand less (more ) of the other good, all other things held constant.