Term
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Definition
| The enjoyment or satisfaction people receive from consuming goods and services. |
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Term
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Definition
| The change in total utility a person receives from consuming one additional unit of a good or service. |
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Term
| Law of diminishing marginal utility |
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Definition
| The principle that consumers experience diminishing additional satisfaction as they consume more of a good or service during a given period of time. |
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Term
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Definition
| The change in the quantity demanded of a good that results from the effect of a change in price on the purchasing power, holding all other factors constant. |
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Definition
| The change in the quantity demanded of a good that results from a change in price making the good or less expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power. |
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Term
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Definition
| This situation where the usefulness of a product increase with the number of consumers who use it. |
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Term
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Definition
| The study of situations in which people make choices that do not appear to be economically rational. |
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Term
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Definition
| The highest-valued alternative that must be given up in order to engage in an activity. |
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Term
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Definition
| The tendency of people to be unwilling to sell a good they already own even if they are offered a price that is greater than the price they would be willing to pay to buy the good if they didn't already own it. |
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Term
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Definition
| A cost that has already been paid and cannot be recovered. |
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Term
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Definition
| A curve that shows the combinations of consumption bundles that give the consumer the same utility. |
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Term
| Marginal rate of substitution (MR) |
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Definition
| The slope of an indifference curve, which represents the rate at which a consumer would be willing to trade off one good for another. |
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