economics: demand

what is marginal utility?

the extra usefulness or additional satisfaction a person gets from using 1 or more unit of product

why does the demand curve look the way it does?

as price increases, the quantity demanded of the items increases

three determinents of demand elasticity

can purchase be delayed? is there an adequate substitute availible? does it use a large portion of income?

what causes substitution effect?

change in quantity demanded due to a change in relevant product

what are three factors that cause a change in demand?

consumer income, consumer taste, price of relevant product

what three factors make up demand?

desire, ability, and willingness to buy a product

three determinants of demand

income, taste + preferences, related goods (compliment + substitute)

the part of economics that deals with behavior of small groups?

micro economics

how is a demand curve similiar/different from a demand schedule?

same: they both display the same information different: schedule is in the form of a table, and curve is on a graph

how does marginal utility and diminishing utility relate to demand?

some items lose value and usefullness as people buy more and more of it.

what is the difference between substitues and complements?

substitutes are replacements for a good, while compliments are used together.

what does the law of demand state?

the quantity demanded of a good or service varies inversely with its price

how does income effect change in quantity demanded?

there is a change in price that alters consumers real income

what is the purpose of a demand schedule?

to know what will be sold at each price

what are two reasons why knowledge of demand essential?

to understand how market economy works, and understand sound business planning

how is a change in quantity demanded shown on the demand curve?

when there is a movement along the demand curve