10th history microeconomics

What is value?

Something that can be expressed in dollars and cents

What does something need to be in order to be valuable?

Be rare/unique and/or provide a utility

What is utility?

something that either has a function and/or provides satisfaction

What is wealth?

an accumulation of goods that are scarce, tangible, have utility, and are transferable from one person to another

What are the four F.O.P.?

Land, labor, capital, and entrepreneurs

What is demand?

The want, willingness, and ability to trade or purchase a good or service at a range of prices

What is the law of demand?

with some things constant, when the prices increase, the quantity demanded decreases

What is the one thing that changes QD?

Change in the price of the original product

what causes the demand curve to shift?

tastes and preferences, income, price expectations, etc

What do the substitute’s price do to the demand of the original product?

If the substitutes price decreases, the demand for the original product decreases

What do the price of complements do to the demand of the original product?

If the complement’s price decreases, the demand of the original product increases

What is demand elasticity?

how much the QD changes when the price changes

What are the three questions that determine demand elasticity?

Are adequate substitutes available? Does the purchase take a large portion of your income? Can the purchase be delayed?