Unit Two,
Quiz Two
Review
This is when you will continue to buy
something, regardless of how high the
price might go, for the most part…
This is when you will continue to buy
something, regardless of how high the
price might go, for the most part…
Inelastic Demand
This is the desire to own something,
and you have the ability to pay for it.
This is the desire to own something,
and you have the ability to pay for it.
Demand
This is the measure of how
consumers will cut back or increase
use of an item based on price
This is the measure of how
consumers will cut back or increase
use of an item based on price
Elastic Demand
This is how you tend to change your
consumption of goods when a change
in price tends to cause our real
income to decline.
This is how you tend to change your
consumption of goods when a change
in price tends to cause our real
income to decline.
Income Effect
When a price for a good is lower, we
tend to buy more of it, but when the
price is higher, we tend to buy less of
it. This is
When a price for a good is lower, we
tend to buy more of it, but when the
price is higher, we tend to buy less of
it. This is
The Law of Demand
This is when one good is often, or
usually bought together at the same
time.
This is when one good is often, or
usually bought together at the same
time.
Complements
If the price of gasoline goes up to 9.50
a gallon, some of us might have our
cars converted to running on propane
or natural gas. This is an example of
If the price of gasoline goes up to 9.50
a gallon, some of us might have our
cars converted to running on propane
or natural gas. This is an example of
The Substitution
Effect
This is a table that lists the quantity of
a good that a person will purchase at
various prices in the market. We all
have these, whether we write them
down or not.
This is a table that lists the quantity of
a good that a person will purchase at
various prices in the market. We all
have these, whether we write them
down or not.
Demand Schedule
Instead of buying Lucky Charms, you
instead by Wegmans Marshmallow
Treasures, a cheaper (and by some
estimations, better) choice.
Marshmallow Treasures would be an
example of…
Instead of buying Lucky Charms, you
instead by Wegmans Marshmallow
Treasures, a cheaper (and by some
estimations, better) choice.
Marshmallow Treasures would be an
example of…
Substitutes
A condition in economics, like when
we do a chart, this is the limitation
that is automatically assumed on that
chart.
A condition in economics, like when
we do a chart, this is the limitation
that is automatically assumed on that
chart.
Ceteris Paribus
As our income increases through the
years, we tend to buy these sort of
things more often, might include
vacations, or nice meals out.
As our income increases through the
years, we tend to buy these sort of
things more often, might include
vacations, or nice meals out.
Normal Goods
This is a graphic representation of a
demand schedule.
This is a graphic representation of a
demand schedule.
A Demand Curve
This can affect demand, by making
you aware something is actually
available (blanket with sleeves),
showing you how good something is,
or fooling you into thinking you need
it.
This can affect demand, by making
you aware something is actually
available (blanket with sleeves),
showing you how good something is,
or fooling you into thinking you need
it.
Advertising
A new snack product has become all
the rage…everyone is eating it. But
then, at the peak of popularity, they
discover it’s been made with
petroleum jelly instead of nougat.
What happens to the demand curve?
A new snack product has become all
the rage…everyone is eating it. But
then, at the peak of popularity, they
discover it’s been made with
petroleum jelly instead of nougat.
What happens to the demand curve?
It shifts to the LEFT
Jordan Spieth just won the Masters, a
very big golf tournament. In a demand
curve for his endorsement for golf and
golf related products, what happens to
the demand curve after his Masters
win.
Jordan Spieth just won the Masters, a
very big golf tournament. In a demand
curve for his endorsement for golf and
golf related products, what happens to
the demand curve after his Masters
win.
It shifts to the RIGHT
This is the hardest thing the
government can control when it
comes to the economy, it affects you,
me, maybe your spouse, friends…
This is the hardest thing the
government can control when it
comes to the economy, it affects you,
me, maybe your spouse, friends…
Consumer
Expectations
The End