Micro Economics chapter 2

a higher-quality; more expensive

Inferior goods are those where you're "making do," and when your income rises, you'll shift to _____, but _____ alternative, instead.

Additional; marginal

The _____ benefit you get from buying one additional item is called its _____ benefit.

Products become less valuable when more people use them

Congestion effect occurs when a good becomes:

Demand increases; demand will decrease

If a good with network effects becomes more popular, its value to the individual consumer _____. If a good with congestion effects becomes more popular, its value to the individual consumer _____.

A rise; diminishes

Moving up along the demand curve due to _____ in price would cause quantity demand to fall, while shifting the demand curve to the left _____ quantity demand for any fixed price.

relatively unimportant

Over short periods of time, increases in population are _____ in their effects on demand compared with increases in population over long periods of time.

Law of demand

The _____ states that the total quantity demanded is higher when the price is lower.

If the benefits exceeds the cost

The cost-benefit principle suggests that you should buy an item when:

Maximize; marginal benefit

When you apply the Rational Rule for Buyers, you can _____ your economic surplus by continuing to buy until price equals _____.

Inferior goods

_____ are those goods you buy less of when your income rises.