The amount of satisfaction obtained from consuming a good/service
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What is rational decision making?
Where consumers allocate their income on goods and services to maximise utility; producer allocate resources to maximise profits
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What is demand?
Quantity of good/service purchased at a given price, over a given period of time
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What is effective demand?
Where a want of a good/service is backed up by the ability to pay
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What relationship is there between the price and QD?
An inverse relationship - price goes up, QD goes down
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What is a market demand curve?
The summation of each individual demand curve for a particular good/service
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What is revenue?
Price x Quantity
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What is marginal utility?
The change in total utility resulting from the consumption of one or more unit of a good
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What does a shift in a demand curve show?
An increase (outwards) or decrease (inwards) in demand
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What are the 6 conditions of demand?
1. Income 2.Change in population size 3. Changes in taste/fashion 4. Prices of substitutes/complementary goods 5. Changes in expectations 6. Changes in credit facilities
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What is an inferior good?
A good that experiences increased demand when incomes go down
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What is a normal good?
A good that experiences increased demand when incomes go up
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What is a complementary good?
Good that are used in conjunction with another good
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What is a substitute good?
Goods that can be used for the same purpose
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What is supply?
What quantity of a good/service that firms are willing and able to sell at any given price in a given period of time
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What is different between a supple curve and a demand curve?
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