1. By: KiKi

2.  Competitive market- a market in which there are many buyers and sellers of the same good or service, none of whom can influence the price at which the good or service is sold  Supply and demand model- a model of how a competitive market works  Demand schedule- shows how much of a good or service consumers will be willing and able to buy at different prices  Quantity demanded- the actual amount of a good or service consumers are willing and able to buy at some specific price  Demand curve- a graphical representation of the demand schedule

3. Price of coffee beans (per pound) Quantity of coffee beans demanded (billions of pounds) $2.007.1 1.757.5 1.508.1 1.258.9 1.0010.0 0.7511.5 0.5014.2 $1.75 $2.00 $1.25 $1.00 $0.75 $0.50 $1.50 7119131517 Quantity of Coffee Beans Price of Coffee Beans

4.  Law of demand- says that a higher price for a good or service, all other things being equal, leads people to demand a smaller quantity of that good or service  Change in demand- a shift of the demand curve, which changes the quantity demanded at any given price  Movement along the demand curve- a change in the quantity demanded of a good that is the result of a change in that good’s price

5. $1.75 $2.00 $1.25 $1.00 $0.75 $0.50 $1.50 7119131517 Price of Coffee Beans Quantity of Coffee Beans Price of coffee beans (per pound) Quantity of coffee beans demanded (billions of pounds) In 2002In 2006 $2.007.18.5 1.757.59.0 1.508.19.7 1.258.910.7 1.0010.012.0 0.7511.513.8 0.5014.217.0 D1 D2

6.  Substitutes- a rise in the price of one good leads to an increase in the demand for the other good  Complements: a fall in prices of one good that makes consumers more willing to buy another good.  Normal goods: a good that depends on consumption. The good s we qualify as “necessary”.  Inferior Goods: the good falls when income rises, considered less desirable good than more expensive goods.  Individual demand curve: shows relationship between quantity demanded and price for an individual consumer.