FARE 1300 Study Guide - Midterm Guide: Inferior Good, Giffen Good, Normal Good

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How much of a good the person wants to consume and different prices. Shows the max amount per unit the person is willing to pay for all the different amounts of a good. Downward slope means that as the price of a good falls, a consumer will want to consume more of that goo. How much of a good the producer will produce at all different prices. The minimum amount per unit that the person will require to produce at each of the different levels of production. Demand curve slopes down to diminish marginal utility: as yield increases, there are diminishing marginal returns to costs. Supply curve slopes upward to diminish marginal product: experience diminishing returns to successive inputs. Diminishing marginal products lead to increasing marginal costs: with each additional unit of yield from our hectare of land, we have to spend somewhat more on our bundle of variable costs.

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