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Demand
chapter 6
| Term | Definition |
|---|---|
| complementary goods | Goods that are in joint demand.The use of one involves the use of the other |
| demand function | A list of all the factors affecting the demand for a good. |
| giffen good | A good for which quantity demanded increases if price rises and quantity demanded falls if price falls |
| income effect | the observation that if the price of a good falls the real income of the consumer is increased , allowing more of any good to be purchased |
| individual demand curve | A graph showing the different quantities of a good (or service) an individual consumer is prepared to buy at each price |
| individual demand schedule | A list or table showing the different quantities of a good or service an individual consumer is prepared to buy at each price |
| inferior good | a good with a negative income effect.A rise in income causes less of it to be demanded while a fall in income causes more of it to be demanded |
| law of demand | the relationship between price and quantity demanded that applies to the vast majority of goods that is if price rises quantity demanded falls and if price falls quantity in demand rises |
| market demand cureve | a graph showing the different quantities of a good or a service that all consumers in the market are prepared to buy at each price |
| market demand schedule | a list or table showing the different quantities of a good or service that all consumers in the market are prepared to buy at each price |
| money income | a person's earnings expressed in money terms over a period of time |
| normal good | a good with a positive income effect.A rise in income causes more of it to be demanded while a fall in income causes less of it to be demanded |
| real income | the purchasing power of a persons money income over a period of time(how much can he/she buy with their income) |
| snob good | a good that is attractive to some consumers because it is expensive.A rise in price will cause an increase in demand and a fall in price will cause a fall in demand |
| substitution effect | the observation that if the price of a falls a consumer is likely to buy more of it because it is cheaper relative to other goods |
| substitute goods | goods that satisfy the same need and so can be used instead of each other |
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jmartineconomics
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