1. Utility
The usefulness of an item purchased that fills a specific need and has value.
For a good or service to have value it must also have a utility. In order to have value a good or service must have the capacity to be useful and provide satisfaction.
Economists use the term utility to describe the satisfaction consumers receive from consumption of goods or services
However, utility is not fixed, the utility of a good or service may very from one person to the next
In your group: identify 3 goods or service and explain why they fit this idea of utility .

2. Utility and Value
Paradox of value: the contradiction between the high value of non-essential goods and services and the low value of essential goods or services EX: some necessities, such as water, have little monetary, while non-necessities, diamonds, have a much higher value. Why? In your groups come up with 3 examples comparing 2 items that reflect the paradox of value

3. Utility
Marginal Utility – the satisfaction or usefulness obtained from acquiring one more unit of a good or service Diminishing Marginal Utility – decreased satisfaction or usefulness as additional units of goods or services are acquired.

4. Utility In your group identify the following:
3 goods or service that would meet the definition of marginal utility and would be less likely to diminish as you acquired more. Explain
3 goods or services that would fit the definition of diminishing marginal utility. Explain

5. Utility
Create a demand curve and schedule for one of your items of diminishing marginal utility Describe how the demand curve can be explained by the principle of diminishing marginal utility

6. Complementary goods
Products that increase the value of other products; products related in such a way that an increase/decrease in the price of one effects the demand for both
Goods or services that are typically used together
When the demand for one rises, for example, burgers, it leads to a rise in demand for the other product, for example, fries.

7. Complementary goods How are complementary goods part of utility?
In your groups Identify 2 complementary goods for the following goods or services:
Milk
Broadband internet connection
Steak
Coffee
Explain how demand in each complimentary good will be effected if price goes up or down for the original good or service?

8. Substitutes Goods
Competing products that can be used in place of one another; products related in such a way that an increase in price for one increases the demand for the other
Services or goods that have an equivalent function and one substitute good can be consumed or used in place of another. They are largely interchangeable and when the demand for one substitute increases, the demand for the other good decreases.
Examples of substitute services: cable systems and satellite systems

9. Substitutes Goods
What is the difference between a complimentary good/service and a substitute good/service?
In your groups identify 1 substitute for each good or service listed below:
Milk
Broadband internet connection
Steak
Coffee
Butter
Cell Phones
CD’s

10. Complementary/ Substitute
In your groups do the following:
List 4 goods or services with 2 complementary goods or services for each item. Explain Why?
Identify 1 substitute goods or services for each one of the 4 goods or services you put on your list. Why is this a substitute?
Create 2 separate Headlines. Each headline should reflect the increase/decrease in price and its affect in demand on 1 of the original goods or services, 1 complementary and the affect on the substitute you choose.