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