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 ELASTIC SUPPLY: Relatively small changes in supply price cause relatively larger changes in quantity supplied. Elastic supply means that changes in the quantity supplied are relatively responsive to changes in the supply price. An elastic supply has a coefficient of elasticity greater than one. You might want to compare elastic supply to inelastic supply, elastic demand, and inelastic demand.
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 Lesson Contents Unit 1: Demand Theory The Theory Making Decisions Utility On To Demand Unit 1 Summary Unit 2: Total Utility A Measure Of Satisfaction Total Utility Schedule Utility Maximization Unit 2 Summary Unit 3: Marginal Utility Incremental Satisfaction Measuring Marginal Utility Diminishing Marginal Utility Getting Satisfied Diamond-Water Paradox Unit 3 Summary Unit 4: The Curves Total Utility Marginal Utility Both Curves Unit 4 Summary Unit 5: Taking Stock Two Laws Two Considerations Unit 5 Summary Course Home
Consumer Demand

This lesson discusses the basics of consumer demand theory, especially the notion of utility. Utility is the fancy-schmancy economic term that means satisfying wants and needs. The purpose of this lesson is to set the stage for a behind-the-scenes look at the demand-side of the market. Because the prices buyers are willing to pay for the goods depend on the utility, an understanding of demand requires an understanding of utility.

• The first unit of this lesson, Demand Theory, introduces the concept of utility and previews the relation between utility, consumer decision making, and demand.
• In the second unit, Total Utility, we take a look at the first of two key technical notions of utility are used to examine the relation between utility and demand.
• The third unit, Marginal Utility, presents and discusses the second of the two technical notions of utility, and the most important notion underlying demand.
• The fourth unit, The Curves, illustrates the total utility and marginal utility concepts with handy graphs.
• The fifth unit, Taking Stock, then wraps up this lesson with an extended preview of the relation between utility and demand.

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SLOPE, SAVING LINE

The positive slope of the saving line is also termed the marginal propensity to save (MPS). This slope is greater than zero but less than one, reflecting induced saving and the Keynesian psychological law of consumer behavior that saving increases by less than the increase in income. The slope of the saving line provides the foundation for the slope of the leakages line used in the injections-leakages model. It thus also affects the magnitude of the multiplier process.

 PURPLE SMARPHIN[What's This?] Today, you are likely to spend a great deal of time calling an endless list of 800 numbers looking to buy either a weathervane with a horse on top or a case of blank recordable DVDs. Be on the lookout for malfunctioning pocket calculators.Your Complete Scope
 Parker Brothers, the folks who produce the Monopoly board game, prints more Monopoly money each year than real currency printed by the U.S. government.
 "My future starts when I wake up every morning . . . Every day I find something creative to do with my life. "-- Miles Davis, musician
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