Supply and demand vocab wrapup 2010
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Transcript of Supply and demand vocab wrapup 2010
Supply and Demand Vocab Wrap-up
Fall 2010
Wrapping Up Vocab for this Unit
Diminishing Marginal Utility: The more you buy of something, the less satisfaction you get from it.Buy a car, get great satisfaction
(you do not buy many cars in your life)Buy a pencil, whoopie, big deal
1st Doughnut = YUMMM!!2nd Doughnut = Yumm3rd Doughnut = umm, yumm?4th Doughnut = I’m full5th Doughnut = ugg, no more
Normal Good: A good for which demand INCREASES as income rises.Computers, TVs,
Inferior Good: A good for which demand DECREASES as income rises.
Generic foods
Compliments: Goods that are consumed together.Peanut butter and JellyHammers and nails
Substitutes: Goods that are consumed as replacements for other goods.
Price of coffee goes up, I substitute tea, or apple juice
Price Ceiling: Artificial price beyond which a good may not increaseRent controls: NYC had a law
prohibiting rent over a certain price after WWII.
Price Floors: Artificial low price (usually set by the government) beyond which a good may not fall
Milk: Govt sets minimum price to keep dairy farmers from losing money.
Quotas: Setting limits or goals on production/ importation or sales Designed to allow increased competition by
limiting importsProtect ecosystems by limiting fishing or
hunting catchesEncourage production by setting high goals
(USSR under Stalin)