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16 Cards in this Set
- Front
- Back
law of demand
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goods price goes up and the demand goes down, and visa versa
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substitution effect
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substituting something for a good if the price of that good goes up
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demand schedule
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table that lists the quantity of a good that a person will purchase at each price in a market
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demand curve
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a graphic representation of a demand schedule
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demand
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the desire to own something and the ability to pay for it
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ceteris paribus
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latin phrase for "all other things held constant"
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normal goods
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goods that consumers demand more of when their incomes increase
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inferior goods
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an increase in income causes demand for these goods to fall
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complements
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two goods htat are bought and used together
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substitution
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goods used in place of one another
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demand curve
Independent? dependent |
I=quantity (x-axis)
D=prices (y-axis) |
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elasticity of demand
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measure of how consumers react to a change in price
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inelastic
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demand for a good that you will keep buying despite a price increase.
less than one |
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elastic
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demand that is sensitive to a price change.
greater than one |
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unitary elastic
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if elasticity is exactly equal to 1
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total revenue
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defined as the amount of money the company receives by selling its goods
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