1.2.2 Demand Flashcards
1
Q
Causes of shifts in demand
A
PIRATES
- Population (more pop = more demand)
- Income (more income = more demand)
- Related goods (changes in one good triggers change in another)
- Advertising
- Taste/fashion
- Expectations
- Seasons
2
Q
What is diminishing marginal utility?
A
Reason why demand curve slopes downwards.
Inverse relationship between price and quantity.
Satisfaction derived from the consumption of an additional unit of a good will decrease as more of a good is consumed.
This means at a high price consumers are less willing to consume.
3
Q
What is total utility?
A
Represents the satifaction gained by a consumerr as a result of theiir overall consumption of a good.
Marginal utility - the change in satisfaction resulting from the consumptioon of each unit of good.
