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16 Cards in this Set
- Front
- Back
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Principle of Diminishing Marginal Utility
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states that people tend to receive less and less (diminishing) additional (marginal) satisfaction (utility) from any good or service as they obtain more and more of it during a specific period of time
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marginal utility schedule
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a tabular model displaying observations of utility received from some good or service
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marginal utility curve
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a graphic representation of observations of utility received from some good or service
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demand
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how manny units of a product will be bought at a given price
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law of demand
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everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and vice versa
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demand schedule
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a table listing various quantities demanded at various prices
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demand curve
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a graph illustrating the various quantities of an item that are demanded at various prices
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change in quantity demanded
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when the change in price of an item causes a change in the number supplied
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change in demand
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the shifting of a demand curve experienced when demand for an item increases or decreases regardless of the price
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increase in demand
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rightward shift, represents a willingness on the part of buyers to demand more of a good or service at every price
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decrease in demand
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leftward shift, represents a decrease in the willingness of buyer to demand an item at any price
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normal good
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a good for which demand typically increases when the buyers' income increase
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inferior good
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a good which typically experiences a decrease in demand as buyers' income increases
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substitute goods
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goods that may be used in place of others, as the price of one of the goods rises consumers tend to buy more of the substitute
ex. chicken and beef, hot dogs and hamburgers, ice cream and ice milk |
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complementary goods
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goods that are usually purchased or used together, when the price of one of the goods rises demand for the other good decreases even though its price has not changed
ex. film and cameras, gasoline and cars, hamburgers and french fries, peanut butter and jelly |
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fad items
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goods and services that appear quickly on the scene, are advertised heavily, and are sold in great quantities over a short period of time
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