Introduction to Graphing 2

Vocabulary flashcards summarizing key concepts related to graphing in economics.

Slope

A measure of the steepness of a line, representing opportunity cost in graphing.

Demand Schedule

A table that shows the relationship between the quantity demanded of a good and its market price.

Law of Diminishing Marginal Utility

As more units of a good are consumed, the additional satisfaction gained from consuming each additional unit tends to decrease.

Total Revenue (TR)

The total income received from selling goods, calculated as Price multiplied by Quantity.

Price Elasticity of Demand

A measure of how responsive the quantity demanded of a good is to a change in its price.

Marginal Rate of Substitution (MRS)

The rate at which a consumer is willing to give up one good in exchange for another while maintaining the same level of satisfaction.

Indifference Curves

Graphs that show all combinations of two goods that provide the same level of utility to a consumer.

Elastic Demand

When the price elasticity of demand is greater than 1; a price change leads to a larger proportional change in quantity demanded.

Inelastic Demand

When the price elasticity of demand is less than 1; a price change leads to a smaller proportional change in quantity demanded.

Unit Elastic Demand

When the price elasticity of demand is equal to 1; price changes do not affect total revenue.