Chapter 8 Flashcards
(7 cards)
1
Q
diminishing marginal rate of substitution
A
tendency to give up less Y for one more X while not caring about increasing X
2
Q
income effect
A
the effect of a change in income on buying plans
3
Q
indifference curve
A
combinations of goods with same level of utility
4
Q
marginal rate of substitution
A
amount of good y to give up for one more unit of good x
5
Q
price effect
A
effect of changing price on quantity of good
6
Q
substitution effect
A
change in Qd because of change in relative price (change of budget line slope)
7
Q
Giffen Good
A
demand has a positive slope
