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ECONOMICS Chapter 3 QUIZLET REVIEW
Terms in this set (24)
Of transmitting information, providing incentives, increasing utility, and redistributing income, which one is NOT one of the functions of price?
Of increased production of cocoa, increased consumption of chocolate, increased manufacture of chocolate, increased orders for chocolate, which of these would occur FIRST?
increased consumption of chocolate
If a customer's first new car gives him a marginal utility of 25 utils, what is the most likely marginal utility that a second identical car would give him?
any number of utils under 25 utils
What condition would most likely persuade a dairy farmer to purchase more cows?
the price of milk
What term do economists use to describe the act of buying?
What is the typical description of a fad item's demand curve?
shift right, then shift left
If you graphed a set of data that supports William Stanley Jevons's principle results in a:
marginal utility curve
A drop in income would have the LEAST effect on the demand for:
2 MULTIPLE CHOICE OPTIONS
A change of people's incomes will cause what?
a change in demand
Are most goods and services always considered normal goods or always considered inferior goods? Why or why not?
No. Most goods can fall into either category depending on the viewpoint of the consumer. To a wealthy person, a used vehicle might be an inferior good, but for much of the world's population, it would be a normal good.
What is a complementary good?
bacon and eggs
What is an inferior good?
What is a normal good?
goods that consumers demand more of when their incomes rise
The local grocery announces an upcoming sale on cheese. What economic scenario will likely be the immediate result of this announcement?
a decrease in the demand for cheese
What is a substitute good?
hamburgers or hot dogs
What is marginal utility?
a second piece of birthday cake's being less enjoyable than the first piece.
Can human relationships also suffer from diminishing marginal utility?
2 MULTIPLE CHOICE OPTIONS
Why do most products eventually suffer a decrease in demand?
due to changes in tastes and preferences
At its first spring sale, your local plant nursery offers evergreen bushes for 40 percent off the regular price. The store sells 300 evergreen bushes, twice the usual number for the month. What has occurred?
there was a change in quantity demanded
What is the principle of diminishing marginal utility?
People tend to receive less and less additional satisfaction from any good or service as they obtain more and more of it in a specific period of time.
When is the demand for complementary goods increased?
When the economy is good and salaries are steady.
What is a marginal utility schedule?
a record of the satisfaction gained from repeated experience
The law that states that everything being constant, the lower the price charged for a good or a service, the greater the quantity of it people will demand and the higher the price, the lower the quantity they will demand is called what?
the law of demand
What does a left shift in the demand curve indicate?
indicates a decrease in demand at every price along the curve
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