Chapter 3 of E.I.O.T. - Part 1
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Created by:
dms42866 on March 9, 2010
Subjects:
Description:
Vocabulary for chapter 3 of econ text
Classes:
Period 3 - SSIV, Period 2 - SSIV, Period 1 - SSIV
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19 terms
Terms | Definitions |
|---|---|
 market | Any place where people buy and sell goods and services |
| good | A tangible item that gives a person utility |
| service | An intangible item that gives a person utility |
| demand | The willingness and ability of buyers to purchase a good or service |
| law of demand | States that as the price of good increases the quantity demanded decreases, and vice versa |
| quantity demanded | The number of units of a good purchased at a specific price |
| law of diminishing marginal utility | States that as a person consumes additional units of a good, the utility gained from each additional unit decreases |
| inverse relationship | A relationship between two factors in which the factors move in opposite directions |
| demand schedule | A table showing the quantities of a good demanded a varying prices |
| demand curve | The graphical representation of the law of demand that shows the amount of a good buyers a willing to buy a various prices |
| normal good | A good for which the demand increases as incomes rise and vice versa. |
| inferior good | A good for which the demand increases as income falls and vice versa |
| neutral good | A good for which the demand remains unchanged as incomes change |
| substitutes | Similar goods for which the price of one and the demand for the other move in the same direction |
| complements | Goods that are consumed together and the price of one moves in the opposite direction as the demand for the other |
| elasticity of demand | The relationship between the percentage change in quantity demanded and the percentage change in price |
| elastic demand | The percentage change in quantity demanded is greater than the percentage change in price |
| inelastic demand | The percentage change in quantity demanded is less than the percentage change in price. |
| unit-elastic demand | The percentage change in quantity demanded is the same as the percentage change in price. |
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