ECONOMICS TERMS- Matching

Match the term with the definition

1. Total utility
2. Anchoring
3. The 'law' of diminishing marginal utility
4. Marginal analysis
5. Behavioral Economics
6. Consumer surplus
7. Giffen Good
8. Inferior good
9. Indifference curve
10. Market demand curve
11. The 'law' of demand
12. Network externality
13. Normal good
14. Diamonds versus water paradox
15. Sunk Cost

DEFINITIONS

A. Horizontal summation of individual demand curves.

B. Difference between total utility and total expenditures for a given quantity of some good.

C. The idea of relating an unknown value to some other known value, even if there is no connection between the two concepts

D. Observation that additional quantities of a given good generally have decreasing value for a consumer.

E. Maximum amount of money a consumer will pay for an additional unit of some good.

F. Typical story used to explain marginal utility.

G. A situation in which the usefulness of a product increases with the number of consumers who use it.

H. Quantity demanded increases when a consumer's (real) income rises.

I. Quantity demanded decreases when a consumer's (real) income rises.

J. Optimal combination of goods for a consumer.

K. Method for calculating choices that best promotes the decision maker's objective.

L. Observation that a lower price generally increases the amount of a good that people in a market are willing to buy.

M. A cost that has already been paid and cannot be recovered

N. The study of situations in which people maker choices that do not appear to be economically rational.

O. Line showing all possible combinations of two goods a consumer finds equally desirable.

P. An upward sloping demand curve that might exist in the case of a very inferior good..