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
