Econ Chapter 4
equilibrium
A state of balance, in economics where price and demand meet
diminishing marginal utility
Decreasing satisfaction or usefulness as additional units of a product are acquired
utility
This is another name for the capacity of a product to be useful.
demand curve
a graph that shows the quantity demanded at all possible prices in the market at a given time
change in quantity demanded
a movement along the demand curve showing that a different quantity is purchased in response to a change in price
substitute good
a product that can replace another product in a market - almond milk and milk; Pepsi and Coke
demand schedule
a table that shows the quantity demanded at all possible prices in the market a given time
Law of Demand
consumers buy more of a good when its price decreases and less when its price increases
complimentary goods
goods that need to be or are often used together - paintbrush and paint; cars and gasoline; flashlights and batteries
change in demand
principle illustrating that consumers demand different amounts at every price, causing the demand curve to shift to the right or left
marginal utility
satisfaction or extra usefulness obtained from acquiring one more unit of a product
market demand curve
the demand curve that shows the quantities demanded by everyone who is interested in purchasing the product
demand
the desire, ability, and willingness to buy a product
diminishing marginal utility
the extra satisfaction we get from using additional quantities of the product begins to decrease
microeconomics
the field of economics that deals with behavior and decision making by individuals and firms
elastic demand
where a given change in price causes a relatively larger change in the quantity demanded
inelastic demand
where a given change in price causes a relatively smaller change in the quantity demanded