law of marginal Flashcards
1
Q
law of diminishing marginal returns
A
that the more of something you add, the lower the impact of each additional unit, assuming all else is fixed. (ceterus paribus)
1
Q
law of diminishing marginal utility
A
that the more an individual consumes (ceteris paribus) the utility of the good/service decreases with every additional unit consumed.
2
Q
inferior goods
A
as income rises the demand for the good decreases
3
Q
normal good
A
as income rises the demand for the good increases
