Economics Unit 2 Test/49 Questions
and Answers
demand - -the desire to own something and the ability to pay for it -law of demand - -consumers will buy more of a good when its price is lower
and less when price is higher -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 -income effect - -the change in consumption that results when a price increase causes real income to decline -demand schedule - -a table that lists the quantity of a good a person will buy at various prices in a market -market demand schedule - -a tale that lists the quantity of a good all consumers in a market will buy at various prices -demand curve - -a graphic representation of a demand schedule -ceteris paribus - -all other things held constant -normal good - -a good that consumers demand more of when their income increases -inferior good - -a good that consumers demand less of when their income increase -demographics - -the statistical characteristics of populations and population segments, especially when used to identify consumer markets -complements - -two goods that are bought to be used together -substitutes - -goods that are bought in place of one another -elasticity of demand - -a measure of how consumers respond to price changes -elasticity equation - -% of change in quantity of good divided by the % of change in the price of the good -inelastic - -describes demand that is no sensitive to price changes
and Answers
demand - -the desire to own something and the ability to pay for it -law of demand - -consumers will buy more of a good when its price is lower
and less when price is higher -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 -income effect - -the change in consumption that results when a price increase causes real income to decline -demand schedule - -a table that lists the quantity of a good a person will buy at various prices in a market -market demand schedule - -a tale that lists the quantity of a good all consumers in a market will buy at various prices -demand curve - -a graphic representation of a demand schedule -ceteris paribus - -all other things held constant -normal good - -a good that consumers demand more of when their income increases -inferior good - -a good that consumers demand less of when their income increase -demographics - -the statistical characteristics of populations and population segments, especially when used to identify consumer markets -complements - -two goods that are bought to be used together -substitutes - -goods that are bought in place of one another -elasticity of demand - -a measure of how consumers respond to price changes -elasticity equation - -% of change in quantity of good divided by the % of change in the price of the good -inelastic - -describes demand that is no sensitive to price changes
