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