Economics Study Sheet for test 2 PDF

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Economics Study Sheet for test 2(abeka)...

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Economics Study Sheet Test 2 (Abeka Academy)

Demand the relationship between a good's price and the amount that people are willing to buy. Supply the relationship between a good's price and the amount that produces are willing to provide for consumers Value in use a good can have this.....is directly related to the benefits their owners receive through their use. Value in exchange what a particular good is worth in for some other good. price the amount of money that a buyer pays the seller for a particular item Market prices those prices at which goods can be sold in an open market with many potential sellers and buyers Diminishing marginal utility which states as one's supply of a specific good or service increase, the satisfaction derived from each additional unit tends to decrease marginal utility the amount of satisfaction that results from a one-unit increase of a profit, tends to become smaller with each additional unit total utility or the total amount of satisfaction received from possessing a particular amount of a good. law of demand which explained the inverse relationship that people choose to buy. This law states that other remain equal, as the price of a food increases, the quantity demanded in decreases in a free market economy, income effect that says when the price of a good falls, consumers tend to buy more of that good or of other items because they can do so without giving up anything good to know for everyone there is a point at which price becomes the decisive consideration the point at which a consumer alters his economic behavior substitution effect indicates that people tend to substitute less expensive goods for ones whose prices have risen demand schedule a list of numbers that compares price with quantity demanded demand curve a graphic representation of the quantity of goods purchases at different prices demand curve always slopes downward and to the right tastes and preferences; income; population prices of related goods; consumer expectations five key factors that can shift this demand curve normal good a good whose demand is direct related to consumers' incomes inferior goods demand for these items decreases as the consumers' incomes increase, and vice versa. substitutes a good capable of being used in place of another complements a good often used in conjunction with another...