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10 Cards in this Set
- Front
- Back
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Law of Demand |
When price increases, quantity demanded will increase and vice versa assuming ceteris paribus. |
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Opportunity Cost |
The next best opportunity forgone. |
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Scarcity |
Scarcity occurs when unlimited wants exceed limited means. Because of scarcity, a choice has to be made (an economic decision between alternatives). |
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Ceteris Paribus |
All other factors remaining the same. |
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Values |
Are a person's strongly held beliefs or principles that influence choices and decisions we make. |
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Complementary goods |
Goods that are used together e.g peanut butter and jam, bread and butter, chips and tomato sauce. |
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Substitute goods |
Goods that can take place of another good e.g margarine and butter. |
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Inferior goods and the demand for them |
A good that is thought to be of less quality and only bought because income is not high enough to buy the luxury alternative. The demand for inferior goods are oppositely related to income, when income rises, demand for inferior goods will fall since the consumer will switch to the luxury alternative and vice versa. |
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Necessity's and Luxuries |
An essential item that must be bought, e.g milk and bread. A luxury items is non essential and are bought once necessities are satisfied e.g chocolate, car, alcohol. |
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Consumer |
A person who purchases goods and services for personal use. |
