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