ECON 2000 Study Guide - Economic Surplus, Opportunity Cost, Diminishing Returns
Document Summary
Vocabulary: utility: that satisfaction or well being that a consumer receives from consuming some good or service, total utility: the total satisfaction resulting form the consumption of a given commodity by a consumer, marginal utility: the additional satisfaction obtained by a consumer from consuming one additional unity of a commodity. Vocabulary: real income: income expressed in terms of the purchasing power of money income; that is, the quantity of goods and services that can be purchased with the money income, substitution effect: the change in the quantity of a good demanded resulting from a change in its relative price (holding real income constant, income effect: the change in the quantity of a good demanded resulting from a change in real income (holding relative prices constant, giffen goods: an inferior good for which the negative income effect outweighs the substitution effect so the demand curve is positively sloped.
