Mason and Jamie's Economics Page
Chapter 4 Econ Summary
Demand
Jamie Ramseyer Mason Elias Mr. Treadway |Period 3
Overview Chapter 4 is about demand and how one must be willing and able to buy a good for demand to be present. Also, the law of demand states price of a good increases, then the quantity demanded of a good decreases and vice versa. This law helps to create a demand curve as when price increases, quantity demanded decreases and is represented as a line with a negative slope. This chapter also discusses elasticity of demand and it is represented as percentage change in quantity demanded divide by percentage change in price.
Key Terms
Market- any place where people come together to buy and sell goods or services
Demand- the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period
Law of Demand- a law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity of the good increases
Quantity demanded- the number of units of a good purchased at a specific price
Law of Diminishing Marginal Utility- a law stating that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases
Demand Schedule- the numerical representation of the law of demand
Demand Curve- the graphical representation of the law of demand
Normal Good- a good for which the demand rises as income rises and falls as income falls
Inferior Good- a good for which the demand falls as income rises and rises as income falls
Neutral Good- a good for which the demand remains unchanged as income rises or falls
Substitute- a similar good. With substitutes, the price of one and the demand for the other move in the same direction
Complement- a good that is consumed jointly with another good. With complements, the price of one and the demand for the other move in opposite direction
Elasticity of Demand- the relationship between the percentage change in quantity demanded and the percentage change in price
Elastic Demand- the type of demand that exists when the percentage change in quantity demanded is greater than the percentage change in price
Inelastic Demand- the type of demand that exists when the percentage change in quantity demanded is the less than the percentage change in price
Unit-elastic Demand- the type of demand that exists when the percentage change in quantity is the same as the percentage change in price
Comprehension/Critical Thinking and Writing
Price Quantity demanded Total Revenue
$0.30 197 $59.10
$0.50 153 $76.50
$0.80 104 $83.20
$1.00 66 $66.00
$1.50 37 $55.50
$2.00 12 $24.00
Demand
Jamie Ramseyer Mason Elias Mr. Treadway |Period 3
Overview Chapter 4 is about demand and how one must be willing and able to buy a good for demand to be present. Also, the law of demand states price of a good increases, then the quantity demanded of a good decreases and vice versa. This law helps to create a demand curve as when price increases, quantity demanded decreases and is represented as a line with a negative slope. This chapter also discusses elasticity of demand and it is represented as percentage change in quantity demanded divide by percentage change in price.
Key Terms
Market- any place where people come together to buy and sell goods or services
Demand- the willingness and ability of buyers to purchase different quantities of a good at different prices during a specific time period
Law of Demand- a law stating that as the price of a good increases, the quantity demanded of the good decreases, and that as the price of a good decreases, the quantity of the good increases
Quantity demanded- the number of units of a good purchased at a specific price
Law of Diminishing Marginal Utility- a law stating that as a person consumes additional units of a good, eventually the utility gained from each additional unit of the good decreases
Demand Schedule- the numerical representation of the law of demand
Demand Curve- the graphical representation of the law of demand
Normal Good- a good for which the demand rises as income rises and falls as income falls
Inferior Good- a good for which the demand falls as income rises and rises as income falls
Neutral Good- a good for which the demand remains unchanged as income rises or falls
Substitute- a similar good. With substitutes, the price of one and the demand for the other move in the same direction
Complement- a good that is consumed jointly with another good. With complements, the price of one and the demand for the other move in opposite direction
Elasticity of Demand- the relationship between the percentage change in quantity demanded and the percentage change in price
Elastic Demand- the type of demand that exists when the percentage change in quantity demanded is greater than the percentage change in price
Inelastic Demand- the type of demand that exists when the percentage change in quantity demanded is the less than the percentage change in price
Unit-elastic Demand- the type of demand that exists when the percentage change in quantity is the same as the percentage change in price
Comprehension/Critical Thinking and Writing
Price Quantity demanded Total Revenue
$0.30 197 $59.10
$0.50 153 $76.50
$0.80 104 $83.20
$1.00 66 $66.00
$1.50 37 $55.50
$2.00 12 $24.00
