complements products that are used together

countercyclical goods when income goes up, quantity demanded of these goods goes down--income elasticity of demand is negative

cross-price elasticity of demand a measure of the sensitivity of sales to change in the price of a related item; percentage change in quantity demanded of item A divided by percentage change in price of item B

cyclical goods when income goes up, quantity demanded of these goods goes up--income elasticity of demand is positive






elastic measure of sensitivity of sales to changes in a determinant of sales






income elasticity of demand a measure of the sensitivity of sales to a change in income

inelastic percentage change in quantity demanded is less than percentage change in price

indifference analysis measuring consumer choice by examining the baskets of goods and services among which the individual is indifferent

indifference curve a graph showing different combinations of goods among which the consumer is indifferent






long run a period of time just long enough that everything is variable






marginal rate of substitution (MRS) the slope of the indifference curve






noncyclical goods products whose sales do not depend on income






price elasticity of demand the sensitivity of sales to price changes; the percentage change in quantity demanded divided by the percentage change in price






substitutes items that can be used in place of each other






unit-elastic percentage change in quantity demanded is equal to percentage change in price