PPG
Graphic illustration showing relationship between price amd quantity demanded
Perfectly Elastic
A product whose demand is very responsive to a change in price
Luxury Goods
The exception to the Law of Demand
Real Income
The buying power or the psychological aspect of money
Consumption
The amount of a good bought, NOT the money spent
Luxury Goods
Items where higher prices brings status and a higher demand
Price
Goes on the vertical axis of a demand curve
Quantity
Goes on the horizontal axis of a demand curve
Complementary Goods
Products that are used together
Demand Schedule
The factors that determine how much will be purchased at any given price
Substitution Effect
The change in the mix of goods purchased as a result of a increasing or decreasing relative proves
Demand
The quantities of a good that consumers are willing and able to purchase at various prices during a given time period
Perfectly Elastic
Good that you will purchase no matter the price
Income Effect
The change in the number of goods purchased as a result of a change in real income
Normal Goods
Goods for which demand increases as income increases
Substitute Goods
Another name for relative goods
Ceteris Parabis
All things held constant
Demand
Causes a SHIFT in the demand curve
Quantity Demand
Causes a SLIDE in he demand curve
Demand Curve
Graphic representation of the relationship between price and quantity demand
Price Elasticity of Demand
How responsive is a change in quantity demand to a change in price