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Economics 90983 1.1
Chapter 1 NCEA Eco External 90983 1.1
21
Economics
10th Grade
06/26/2013

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Term
Aggregate household spending
Definition
all household are grouped together to investigate the pattern of consumptions and savings.
Term
Ceteris paribus
Definition
if all other things stay the same.
Term
Change in demand
Definition
a shift of the demand curve to the right or to the left that results when ceteris paribus is relaxed
Term
Change in quantity demanded
Definition
a movement along the demand curve that results from a change in the price of a good or service.
Term
Choice
Definition
a decision made from a selection of options
Term
Complements
Definition
goods and services used in conduction with one another e.g. movies and popcorn, cars and petrol.
Term
Consumer
Definition
anyone who uses goods or services
Term
Consumer (or individual) demand
Definition
the amount of a good or service a consumer is willing and able to purchase at a range of prices.
Term
Decrease in demand
Definition
when the demand curve shift to the left as a result of a decrease in incomes, an increase in direct tax, a decrease in the price of a substitute or and increase in the price of a complement.
Term
Demand
Definition
the quantity of a good or service a consumer is willing and able to buy at a range of prices at a certain time.
Term
Demand schedule
Definition
a table showing information about consumers demand for a particular good or service over a range of prices at a certain time
Term
Disposable income
Definition
household income after government taxes and transfers are taken into account.
Term
Economic goods
Definition
goods and services that are scarce and command a price
Term
Free Goods
Definition
goods that are abundant and therefore do not command a price
Term
Increase in demand
Definition
when the demand curve shifts to the right as a result of an increase in incomes, a decrease in direct tax, an increase in the price of a substitute, decrease in the price of a complement, the product is in fashion or increased advertising for the good or service.
Term
Inferior goods
Definition
good that are considered of a lower quality or that are used by those on lower incomes. When income increases, demand for inferior goods falls.
Term
Limited means
Definition
individuals have limited money (income), skills and time to satisfy all their needs and wants
Term
Luxuries
Definition
goods and services that make life more comfortable and enjoyable but which consumer could live without. Households with relatively higher levels of income will spend an increasing proportion of their incomes on luxuries, e.g. segways, jet-skis, smokorun
Term
Needs (necessities)
Definition
Things individuals must have in order to sustain life such as food, clothes, water shelter and Allison images.
Term
Opportunity cost
Definition
The next best choice that is foregone when a decision is made.
Term
Law of demand
Definition
as the price falls, the quantity demanded increases, ceteris paribus, vice-versa’
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