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Chapter 3

ECON 2100 Chapter Notes - Chapter 3: Demand Curve


Department
Economics
Course Code
ECON 2100
Professor
Ross Mc Kitrick
Chapter
3

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Definitions
Willingness to Pay (WTP) - the monetary value to an individual of enjoying the benefits of a
particular good or service, rather than go without that good or service
Total Willingness to Pay- the amount a person is willing to pay to attain a particular level of
consumption rather than go without the good entirely
Marginal Willingness to Pay- a person's willingness to pay for one or more unit of a good or
service
Demand Curve- the demand curve shows the quantity of a good or service that an individual or
group of individuals wishes to purchase and consume at any particular price
  
Inverse Demand Curve- expressing the demand curve for a good in terms of price people are
willing to pay as a function of the quantity
Shadow Prices- Imputing a price for an input or output that reflects their opportunity costs
when markets fail to fully account for these opportunity costs
Chapter 3- Benefits and Costs, Supply and Demand
October 7, 2013
11:21 AM
ECON2100 Page 1
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