Supply Analysis and Consumer Behavior Theory

A collection of vocabulary flashcards covering key definitions and concepts from the Supply Analysis and Consumer Behavior Theory lecture notes.

Supply

The quantity of goods or services producers are willing and able to sell at various prices.

Law of Supply

The economic principle stating that as price increases, quantity supplied increases, and vice versa.

Supply Curve

A graph showing the relationship between price and quantity supplied, which generally slopes upward from left to right.

Determinants of Supply

Factors affecting supply, which include cost of production, technology, government policies, number of sellers, and future price expectations.

Consumer Behavior

The study of how individuals decide what products or services to buy and why they make purchasing decisions.

Utility

The satisfaction or benefit received from consuming a product.

Total Utility

The total satisfaction gained from consuming several units of a product.

Marginal Utility

The additional satisfaction gained from consuming one more unit of a product.

Law of Diminishing Marginal Utility

The principle stating that as consumption increases, additional satisfaction decreases.

Consumer Equilibrium

Occurs when a consumer achieves maximum satisfaction within a given budget.