Economics Chapter 4 Review

the portion of a change in quantity demanded caused by a change in price that makes other products more or less costly ________

substitution effect

On a demand curve, movement along the curve, as opposed to a shift in the entire curve, is a result of _________

a change in price

what is the income effect?

a change in quantity demanded caused by a change in consumer income

Which product most likely has a demand that is inelastic?

a vital medicine

consumer demand for different amounts at every price, causing the demand curve to shift to the left or the right ________

change in demand

movement along the demand curve showing that a different quantity is purchased in response to a change in price ________

change in quantity demanded

products related in such a way that an increase in the price of one reduces the demand for the other ________

compliments

combination of desire, ability, and willingness to buy a product ________

demand

graph showing the quantity demanded at each and every possible price that might prevail in the market at a given time ________

demand curve

the extent to which a change in price causes a change in the quantity demanded _______

demand elasticity

A hungry man is willing to pay a high price for food. After he is no longer hungry, he is not willing to pay the same high price. Which of the following best defines this example?

diminishing marginal utility

To estimate elasticity, compare the _________ of a price change to the _________ of the change in total revenue.

direction, direction

Which would an economist consider a likely complement for coffee?

donuts

What test do economists use to measure elasticity?

total expenditures

type of elasticity in which the percentage change in the independent variable (usually price) causes a less than proportionate change in the dependent variable (usually quantity demanded or supplied)

inelastic

Changes in quantity demanded and changes in price have a(n) _________ relationship.

inverse

rule stating that more will be demanded at lower prices and less at higher prices ________

law of demand

satisfaction or usefulness obtained from acquiring one more unit of a product ________

marginal utility

Which would an economist consider a likely substitute for coffee?

tea

What are the characteristics of demand?

the desire, ability, and willingness to buy a product