MICRO - Appendix B

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Author:
abjones.92
ID:
251041
Filename:
MICRO - Appendix B
Updated:
2013-12-05 15:28:20
Tags:
Micro Economics Law Demand
Folders:
The,Law,of,Demand
Description:
Economics
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  1. Preferences
    Your wants and their intensities
  2. Demand
    Consumers' willingness and ability to pay for a particular product/service
  3. Quantity Demanded
    Amount you actually plan to buy at a give price
  4. Market Demand
    Supply of demands of all individuals willing and able to buy a particular product/service
  5. Law of Demand
    Quantity demanded of a product/service decreases if price of the product/service rises. Increases if price of product/service falls.
  6. Five Ways to Change Demand
    1.Prefences 2.Prices of related products 3.Income 4.Expected future prices 5.Number of consumers
  7. Increase of Demand
    Increase in consumers willingness and ability to pay
  8. Decrease of Demand
    Decrease in consumers willingness and ability to pay
  9. Change in preference
    Causes a change in demand, not a change in quantity demanded.
  10. Subsitutes
    Products and services used in place of each other to satisfy the same want.
  11. Complement
    Products/Services used together to satisfy same want (Batteries & Camera)
  12. Normal Goods
    Products/Services you buy more of when you income increases
  13. Inferior Goods
    Products/Services you buy less of when you income increases
  14. Elasticity (Price Elasticity of Demand)
    Measures by how how much quantity demanded responds to a change in price. Think responsiveness!
  15. Elastic
    For elastic demand large response in quantity demanded when price rises (The more and better subsitutes available the greater the elasticity) You determine demand as elastic when (% change in quantity)/(% change in price) = more than 1
  16. Inelastic
    For inelastic demand small response in quantity demanded when prices rises (Medication) You determine demand as inelastic when (% change in quantity)/(% change in price) = less than 1
  17. Total Revenue
    All money a business receives from sales, equal to price per unit ℗ multipled by quantity sold (q)

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