Economics Ch 4
substitution effect
a change in the amount that consumers will buy because they buy substitute goods instead
elasticity of demand
a measure of how responsive consumers are to price changes
change in quantity demanded
an increase or decrease in the amount that consumers are willing and able to buy in response to a change in price
complements
goods and services that are used together, so a rises in demand for one increases the demand for the other
substitutes
goods and services that can be used in place of each other
income effect
the change in the amount that consumers will buy because the purchasing power of their income changes
inferior goods
the goods consumers demand less of when their income rises
normal goods
the goods consumers demand more of when their income rises
demand
the willingness to buy a good or service and the ability to pay for it
change in demand
when something prompts consumers to buy different amounts at every price