ECONOMICS QUIZ 4.1-4.2

law of demand

consumers will buy more of a good when its price is lower and less when its price is higher

inferior good

demand less when income increases

normal good

good that consumers demand more of when their incomes increase

substitutes

goods that are used in place of one another

demand curve

a graphic representation of a demand schedule

demand schedule

a table that lists the quantity of a good A PERSON will buy at a given prices in a market

market demand schedule

a table that lists the quantity of good ALL CONSUMERS will buy at various prices

ceteris paribus

all other things held constant

income effect

change in consumption that results when a price increase causes real income to decline

demographics

statistical characteristics of populations and population segments

demand

the desire to own something and the ability to pay for it

complements

two goods bought and used together

substitution effect

when consumers react to an increase in a good's price by consuming less of that good and more of a substitute good