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Definition
| the pleasure, satisfaction, or need fulfillment that people obtain from the consumption of goods and services |
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| the amount of added utility gained from a one-unit increase in consumption of a good, other things being equal |
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| principle of diminishing marginal utility |
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Definition
| the principle that the greater the consumption of some good, the smaller the increase in utility from a one-unit increase in consumption of that good |
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Term
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Definition
| a state of affairs in which a consumer cannot increase the total utility gained from a given budget by spending less on one good and more on another |
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Definition
| the part of the increase in quantity demanded of a good whose price has fallen that is caused by substitution of that good for others that are now relatively more costly |
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Definition
| the part of the change in quantity demanded of a good whose price has fallen that is caused by the increase in real income resulting from the price change |
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Definition
| an inferior good accounting for a large share of a consumer's budget that has a positively sloped demand curve because the income effect of a price change outweighs the substitution effect |
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Definition
| the difference between the maximum that a consumer would be willing to pay for a unit of a good and the amount that he or she actually pays |
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Definition
| the difference between what producers receive for a unit of a good and the minimum they would be willing to accept |
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Term
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Definition
| the part of the economic burden of a tax that takes the form of consumer and producer surplus that is lost because the tax reduces the equilibrium quantity sold |
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