Microeconomics chapter 2 Demand

Decrease in demand

A decrease in the quantity demanded of a good, service or resource at every price. Leftward shift on demand curve.

Normal good

A good for which there is a direct relationship between the demand for the good and income. For normal goods, an increase in income increases demand, and a decrease in income decreases demand.

Inferior good

A good for which there is an inverse relationship between the demand for the good and income. For inferior goods, an increase in income decreases demand, smd a decrease in increases demand.

Demand curve

A graphical representation of the relationship between the price of a good, service, or resource snd the quantity that individuals and firms are willing and able to buy, all else held constant.

Law of demand

A principle in economics that states that as the price of a good, service, or resource rises, the quantity demanded sill fall, and vice versa, all else held constant

Demand schedule

A tabular representation of the relationship between the price of a good, service, or resource and the quantity individuals and firms are willing and able to buy, all else held constant.

Good

A tangible product that consumers, firms or governments wish to purchase.

Increase in demand

An increase in the quantity demand of a good service, or resource at every price. Represents a rightward shift on demand curve.

Service

An intangible product or action that consumers, firms, or governments wish to purchase.

Resource

Any item, whether a gift of nature, the result of production, or the result of human effort, that is used to produce goods and services.

Market

Any place where, or mechanism by which, buyers and sellers interact to trade goods , services or resources.

Complements

Goods, services , or resources that are used or consumed with one another.

Substitutes

Goods, services, or resources that are viewed as replacements for one another.

Buyers

Market participants who seek tocobtsin goods, services, and resources

Expectations

The anticipation it indiciduals and firms of costs and benefits that lie in the future.

Change in quantity demanded

The change in the quantity of a good, service or resource that consumers firms, and governments are willing and able to buy due to a change in its price.

Income effect

The effect that a change in the price of a good, service, or resource has on the purchasing power of income.

substitution effect

The effect that a change in the price of one good, service, or resource has on the demand for another.

Diminishing marginal utility

The nevative relationship between the quantity of a good, servicd or resource and the marginal utility obtained form each additional unit consumed in a given period of time.

Market demand

The overall or total demand for a good service or resource. It represents the summation of individual demand curves, wherher they represent individuals, communities states or nations.

Tastes and preferences

The perception of the desirability associated with consuming a good service or resource.

Quantity demanded

The quantity of a good, service, or resource that consumers, firms, and governments are willing and able to buy at a given price, ceretis paribus