Econ 208 Chapter 6 Vocab

Front 1

utility

Back 1

the satisfaction or well-being that a consumer receives from consuming some good or service

Front 2

total utility

Back 2

the total satisfaction resulting from the consumption of a given commodity by a customer

Front 3

marginal utility

Back 3

the additional satisfaction obtained from consuming one additional unit of a commodity

Front 4

law of diminishing marginal utility

Back 4

the utility that any consumer derives from successive units of a particular product consumed over some period of time diminishes as total consumption of the product increases (if the consumption of all other products is unchanged)

Front 5

real income

Back 5

income expressed in terms of the purchasing power of money income -- that is, the quantity of goods and services that can be purchased with the money income

Front 6

substitution effect

Back 6

the change in the quality of a good demanded resulting from a change in its relative price (holding real income constant)

Front 7

income effect

Back 7

the change in teh quantity of a good demanded resulting from a change in real income

Front 8

giffen good

Back 8

an inferior good for which the income effect outweighs the substitution effect so that the demand curve is positively sloped

Front 9

consumer surplus

Back 9

the difference between the total value that consumers place on all units consumed of a commodity and the payment that they actually make to purchase that amount of the commodity