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15 Cards in this Set

  • Front
  • Back
what three things must exist in order to have demand?
desire
willingness
and ability to buy a good or service
Law of demand
quantity demanded and price move in opposite directions
market demand
total demand of all consumers for their product or service
what type of slope does the demand curve always have?
negative
define utility
something that provides pleasure, usefulness or satisfaction
the principle that our additional satisfaction tends to go down the more units are consumed
diminishing marginal utility
what is diminishing marginal utility?
the principle that our additional satisfaction tends to go down the more units are consumed.
why does diminishing marginal utility help explain why the deemand curve slopes downward?
when we buy something, we usually ask if the marginal utility we will get from a purchase is worth the money we have to give up to get it. marginal utility diminishes when we consume more of a product so we are willing to pay less for the second item.
when the demand slope curves downward, what is that telling us
we would be willing to pay the highest price for the first unit we consume, and a slightly lower for the next, etc.
name the factors that cause a change in demand
# of consumers
income
tastes
expectations
substitutes
complements
name the factors that cause a change in demand
income
tastes
expectations
substitutes
complements
name the factors that cause a change in demand
income
tastes
expectations
substitutes
complements
changes in the number of consumers?
more consumers, higher demand
changes in consumers incomes
economy healthy=more money to spend willing to buy more of a product at any particular price
changes in consumers tastes
product becomes popular demand shifts right