Microeconomics – Pindyck – Vocabulary – Chapter 4,5

A positive network externality in which an individual demands a good in part because many other people have the good.

Goods that tend to be used together, so that an increase in the price of one good tends to decrease the demand for the other.

The difference between the amount consumers are willing to pay for a good and the amount they actually pay.

The amount of a good consumers are willing to purchase as a function of its price.

The optimum allocation of income between two goods may be determined by choosing the highest indifference curve that is tangent to the budget line, or by choosing the lowest budget line that touches a given indifference curve.

The quantity of a good consumed as a function of income.

A good whose demand curve slopes upward as a result of a large income effect

A curve that includes the utility-maximizing combinations of goods associated with every income level.

The increase in consumption brought about by an increase in income, when the prices of goods are held constant.

A good for which consumption falls as an individual's income rises.

The horizontal summation of all individual consumers' demand curves.

The dependence of an individual's demand on the consumption levels of other people.

A good for which consumption increases when income rises.

A curve derived by tracing the utility-maximizing combinations of two goods as the price of one changes.

An equation that separates the effect of a price change on quantity demanded into an income and a substitution effect.

A negative network externality in which an individual's demand for a good is higher the fewer are the other people who have it.

Goods that compete in the market, so that if the price of one good increases, the quantity demanded of the other will also increase.

A law that prohibits contracts, combinations, or conspiracies that restrain trade, and makes monopolizing or attempting to monopolize illegal.