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Demand
the desire, ability, and willingness to buy a product.
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Microeconomics
- Is the area of economics that deals with the
- behavior and decision-making by small units, such as individuals and firms.
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Demand Schedule
A listing that shows the various quantities demanded for a particular product at all prices that might prevail in the market at a given time.
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Demand Curve
A graph showing the quantity demanded at each and every price that might prevail in the market.
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Law of Demand
- states that the quantity demanded of a good or service
- varies inversely with its price.
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Market Demand Curve
- the demand curve that shows the quantities
- demanded by everyone who is interested in purchasing the product.
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Marginal Utility
- the extra usefulness or satisfaction a person gets from
- acquiring or using one more unit of a product.
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Diminishing Marginal Utility
- States that the extra satisfaction we get from
- using additional quantities of the product begins to diminish.
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Change in Quantity Demanded
a movement along the demand curve that shows a change in the quantity of the product purchased in response to a change in price.
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Income Effect
the change in quantity demanded because of a change in price that alters a consumers’ real income.
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Substituion Effect
is the change in quantity demanded because of the change in the relative price of the product.
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Change in Demand
Consumers demand different amounts at every price, causing the demand curve to shift to the left or right.
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Substitutes
Competing products that can be interchangeably used.
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Complements
Product that increase the value of other products.
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Supply
the amount of a product that would be offered for sale at all possible prices that could prevail in the market.
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Law of Supply
The principle that suppliers will normally offer more for sale at higher prices and less at lower prices.
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Supply Schedule
a listing of various quantities of a particular product supplied at all possible prices in the market.
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Supply Curve
a graph showing the various quantities supplied at each and ever price that might prevail in the market.
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Market Supply Curve
the supply curve that shows the quantities offered at various prices by all firms that offer the product for sale in a given market.
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Quantity Supplied
The amount that producers bring to market at any given price.
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Change in Quantity Supplied
the change in the amount offered for sale in response to a change in price.
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Change in Supply
a situation where suppliers offer different amounts of products for sale at all possible prices in the market.
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Subsidy
A government payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
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Supply Elasticity
a measure of the way in which quantity supplied responds to a change in price.
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