● Economic Principles ..
a. Microeconomics - Study of the economic behavior of individual units of an economy (such as a person, household, firm, or industry).
b. Marginal analysis - An analysis of how individuals, businesses and governments make decisions. Marginal = Additional
c. Utility - Satisfaction or happiness people get from consuming a good or service.
d. Law of Diminishing Marginal Utility = Law of Decreasing Additional Satisfaction
e. Utils - A unit used to quantify satisfaction; they are completely subjective.
Demand curve = Marginal benefit curve
Supply curve = Marginal cost curve
f. Law of supply - An increase in price gives producers an incentive to produce more.
g. Diamond-water paradox - Although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.
g. Substitution effect - As prices rise consumers will replace expensive items with less costly alternatives.
h. Elasticity of demand - a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.
i. Elasticity of supply - a measure of the responsiveness of quantity supplied to a change in price.
b. Marginal analysis - An analysis of how individuals, businesses and governments make decisions. Marginal = Additional
c. Utility - Satisfaction or happiness people get from consuming a good or service.
d. Law of Diminishing Marginal Utility = Law of Decreasing Additional Satisfaction
e. Utils - A unit used to quantify satisfaction; they are completely subjective.
Demand curve = Marginal benefit curve
Supply curve = Marginal cost curve
f. Law of supply - An increase in price gives producers an incentive to produce more.
g. Diamond-water paradox - Although water is on the whole more useful, in terms of survival, than diamonds, diamonds command a higher price in the market.
g. Substitution effect - As prices rise consumers will replace expensive items with less costly alternatives.
h. Elasticity of demand - a measure of the relationship between a change in the quantity demanded of a particular good and a change in its price.
i. Elasticity of supply - a measure of the responsiveness of quantity supplied to a change in price.
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