Term
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Definition
| A household’s _____________ describes the limits to its consumption choices. |
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Term
| diminished marginal rate of substitution |
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Definition
| A _______________ is a general tendency for a person to be willing to give up less of good y to get one more unit of good x , while at the same time remaining indifferent as the quantity of x increases. |
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Term
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Definition
| The effect of a change in income on plans is called the ____________ . |
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Term
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Definition
| An _________ is a line that shows combinations of goods among which a consumer is indifferent. |
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Term
| marginal rate of substitution (MRS) |
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Definition
The _______ is the rate at which a person will give up good y (the good measured
on the y -axis) to get an additional unitof good x (the good measured on the x -axis) while remaining indifferent (remaining on the same indifference curve). |
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Term
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Definition
| The effect of a change in the price of a good on the quantity of the good consumed is called the ____________ . |
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Term
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Definition
| A household’s ____________ is its income expressed as a quantity of goods that the household can afford to buy. |
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Term
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Definition
A ________ is the price of one good
divided by the price of another good. |
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Term
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Definition
| The ____________ is the effect of a change in price on the quantity bought when the consumer (hypothetically) remains indifferent between the original situation and the new one. |
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