Chapter 3 Terms Flashcards
The tendency of people to receive less and less additional satisfaction from any good or service as they obtain more and more of it during a specific amount of time.
Principle of diminishing marginal utility
A tabular model displaying observations of utility received from some good or service.
Marginal utility schedule
A graphic representation of observations of utility received from some good or service.
Marginal utility curve
The number of units of a product that will be bought at a given price.
Demand
A law stating that, everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and the high the price, the lower the demand.
Law of demand
A tabular model listing various quantities demanded at various prices
Demand schedule
A graph illustrating the various quantities of an item that are demanded at various prices.
Demand curve
A situation in which the change in the price of an item cause a change in the number demanded.
Change in quantity demanded
The shifting of a demand curve experienced when demand for an item increases or decreases regardless of price
Change in demand
A rightward shift in the demand curve representing a willingness on the part of buyers to demand more of a good or service at any price.
Increase in demand
A leftward shift in the demand curve representing a decrease in the willingness of buyers to demand an item at any price.
Decrease in demand
An item for which demand typically increases when the buyers’ incomes increases.
normal goods
An item that typically experiences a decrease in demand as buyers’ income increases.
Inferior goods
Items that resemble one another and that may be used in place of each other
Substitute goods
Items that are usually purchased or used together.
Complementary goods
