Econ Chapter 4

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

the study of the economic behavior and decision making of small units, such as individuals, families, and businesses

a table that shows the relationship between the price of a good and the quantity demanded

a curve that shows the relationship between the price of a product and the quantity of the product demanded

consumers buy more of a good when its price decreases and less when its price increases

the demand curve that shows the quantities demanded at different prices by everyone who is interested in purchasing the product

the extra usefulness or satisfaction a person gets from acquiring or using one more unit of a product

decrease in satisfaction or usefulness from having one more unit of the same product

movement along the demand curve showing that a different quantity is purchased in response to a change in price

the change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power (ex. price goes down so people feel wealthier and buy more)

when consumers react to an increase in a good's price by consuming less of that good and more of other goods (price of butter goes up so consumers buy margarine instead)

a shift of the demand curve, which changes the quantity demanded at any given price

Goods and services that can be used for the same purpose.

two goods (often used together) for which an increase in the price of one leads to a decrease in the demand for the other (ex. raising the price of computers causes sales of software to drop)

the degree to which demand for a product is affected by its price