Principle 3

Question 1

Consumer

Answer 1

a person who uses products and/or services, especially for personal needs

Question 2

Producer

Answer 2

providers of goods and/or services

Question 3

Goods

Answer 3

tangible items for use or consumption

Question 4

Services

Answer 4

actions people perform, fulfilling a need or want of others

Question 5

Marginal Utility

Answer 5

the gain from an increase or loss from a decrease in the consumption of a good or service

Question 6

Law of diminishing utility

Answer 6

the more of the good the consumer already has, the lower the marginal utility provided by an extra unit of that good

Question 7

Marginal cost

Answer 7

the cost added by producing one additional unit of a product or service

Question 8

Law of diminishing returns

Answer 8

if most production resources are fixed, increasing the quantity of one resource will eventually lead to less and less productivity

Question 9

Principle 3

Answer 9

Rational people think at the margin.