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VALUE ADDED: The increase in the value of a good at each stage of the production process. The value that's being increased is specifically the ability of a good to satisfy wants and needs either directly as a consumption good or indirectly as a capital good. A good that provides greater satisfaction has greater value. In essence, the whole purpose of production is to transform raw materials and natural resources that have relatively little value into goods and services that have greater value.
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Lesson 5: Demand | Unit 2: Law of Demand
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Page: 8 of 20
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- The law of demand, which is a fundamental economic principle stating that demand price and quantity demanded are inversely related, ceteris paribus.
- Ceteris paribus, a Latin term meaning that other things remain unchanged. It is used to control for factors other than price, that affect demand.
- Why the law of demand works because of the income and substitution effects.
- The income effect, which exists because price changes affect the purchasing power of buyers' given incomes.
- The substitution effect, which exists because price changes make other goods relatively more or less expensive.
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DISMAL SCIENCE A term for the study of economics developed during the late 18th and early 19th century when economists concluded that continued population growth would push wages and living standards to a minimal subsistence level and keep them there. It persists to the present time because economics continue to point out that actions result in opportunity cost, that nothing is free, and that eventually society has to pay the price for what it does.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time waiting for visits from door-to-door solicitors wanting to buy either yellow cotton balls or a set of steel-belted radial snow tires. Be on the lookout for the happiest person in the room.
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This isn't me! What am I?
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The first paper currency used in North America was pasteboard playing cards "temporarily" authorized as money by the colonial governor of French Canada, awaiting "real money" from France.
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"When you play, play hard; when you work, don't play at all. " -- Theodore Roosevelt, 26th US president
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IARA
Increasing Absolute Risk Aversion
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