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| Question | Answer |
| Individual demand curve | Shows how much of a good or service the consumer plans to demand at different possible prices. |
| Law of demand | As a good's price falls, more is demanded. |
| Shift of a demand curve | The movement of a demand curve to a new position. |
| Increase in demand | A rightward shift of the demand curve. |
| Decrease in demand | A leftward shift of the demand curve. |
| Extension of demand | An adjustment or movement down a demand curve following a fall in the good's price. |
| Contraction of demand | An adjustment or movement up a demand curve following an increase in the good's price. |
| Condition of demand | A determinant of demand, other than the good's own price, that fixes the position of the demand curve. A change in one of these leads to a shift in demand. |
| Rational Behaviour | Acting in pursuit of self-interest, which for a consumer means attempting to maximise the welfare, satisfaction or utility gained from the goods and services consumed. |
| Utility | The satisfaction or economic welfare an individual gains from consuming a good or service. |
| Marginal Utility | The additional welfare, satisfaction or pleasure gained from consuming one extra unit of a good. |
| Hypothesis of diminishing marginal utility | For a single consumer the marginal utility derived from a good or service diminishes for each additional unit consumed. |
| Asymmetric information | When one party to a market transaction possesses less information relevant to the exchange than the other. |
| Behavioural Economics | A method of economic analysis that applies psychological insights into human behaviour to explain how individuals make choices and decisions. |
| Rule-of-thumb | A rough and practical method or procedure that can be easily applied when making decisions. |
| Bounded Rationality | When making decisions, an individual's rationality is limited by the information they have, the limitations of their minds, and the finite amount of time available in which to make decisions. |
| Bounded self-control | Limited self-control in which individuals lack the self-control to act in what they see as their self-interest. |
| Cognitive Bias | A mistake in reasoning or in some other mental thought process occurring as a result of, for example, using rules-of-thumb or holding onto one's preferences and beliefs, regardless of contrary information. |
| Availability Bias | Occurs when individuals makes judgements about the likelihood of future events according to how easy it is to recall examples of similar events. |
| Anchoring | A cognitive bias describing the human tendency when making decisions to rely too heavily on the first piece of information offered. This is used when making subsequent judgements. |
| Social norms | Forms or patterns of behaviour considered acceptable by a society or group within society. |
| Economic sanctions | Restrictions imposed by regulations that restrict an individual's freedom to behave in certain ways. Breaking a sanction can lead to punishment. |
| Nudges | Factors which encourage people to think and act in particular ways. Nudges try to shift group and individual behaviour in ways which comply with desirable social norms. |
| Altruism | Concern for the welfare of others. |
| Fairness | The quality of being impartial, just, or free of favouritism. It can mean treating everyone the same/equally. |
| Choice Architecture | A framework setting out different ways in which choices can be presented to consumers, and the impact that presentation makes on consumer decision making. |
| Default Choice | An option that is selected automatically unless an alternative is specified. |
| Framing | How something is presented influences the choices people make. |
| Mandated choice | People are required by law to make a decision. |
| Restricted choice | Offering people a limited number of options so that they are not overwhelmed by the complexity of the situation. If there are too many choices, people may make a poorly thought out decision or not make one at all. |
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