Economics 3 Word Scramble
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Term | Definition |
demand | the desire to own something and the ability to pay for it |
law of demand | consumers buy more of a good when its price decreases and less when its price increases |
income effects | change in consumption resulting from a change in income |
no changes other than price that could affect the consumer's decision | demand curves are accurate only as long as there are |
normal goods | good that consumers demand more of when their income increases |
inferior goods | good that consumers demand less of when their income increases |
used car, generic brands | example of inferior goods |
your demand will rise | if you expect prices to rise |
complements | two goods that are bought and used together |
substitutes | goods used in place of one another |
elasticity of demand | measure of how consumers react to price changes |
inelastic | describes demand that is not very sensitive to change in price |
elastic | describes demand that is very sensitive to change in price |
bottled water or computers | example of elastic goods |
but where the price began is the deciding factor | percentage increases can be the same |
substitutes, importance, N vs. L, and time | 4 factors of elasticity of demand |
you are more likely to buy it if the price increases | if there are few substitutes for a good |
total revenue | total amount of money a firm receives by selling goods or service |
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