Chapter 3 Terms Flashcards
A tabular model based upon the observation of your eating the hypothetical candy bars
Marginal utility schedule
A graphic representation of the marginal utility schedule
Marginal utility curve
Not only as a willingness of consumers to purchase a product but also as their act of purchasing it
Demand
States that everything else being held constant, the lower the price charged for a good or service, the greater the quantity of it people will demand, and the higher the price, the lower the quantity they will demand
Law of demand
A table listing various quantities demanded at various prices
Demand schedule
To visualize the law of demand better, economists take the information from the demand schedule and put it into a line graph known as the
Demand curve
Whenever a change in price causes a change in the number of items demanded
Change in quantity demand
What does a product experience when a demand curve shifts?
Change in demand
A rightward shift, which means that buyers are willing to demand more of a good or service at every price along the curve
Increase in demand
A leftward shift, demand would decrease at every price
Decrease in demand
Goods that experience an increase in demand because of an increase in consumers’ incomes
Normal goods
Items such as recapped tires, travel on city buses, used cars, secondhand clothing, and powdered milk that see a decline in sales as consumers’ incomes increase
Inferior goods
Goods that households may use in place of others
Substitute goods
Goods that are usually purchased or used together
Complementary goods
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
Principle of diminishing marginal utility
