B limited incomes and wealth c the law of demand d

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b. Limited incomes and wealth. c. The law of demand. d. All of the above.
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25 of 69 3.1 - Firms and Households: The Basic Decision-Making Units 3.2 - Input Markets and Output Markets: The Circular Flow 3.3 - Demand in Product/Output Markets 3.3.1 - Changes in Quantity Demanded versus Changes in Demand 3.3.2 - Price and Quantity Demanded: The Law of Demand 3.3.3 - Other Determinants of Household Demand 3.3.4 - Shift of Demand versus Movement Along the Demand Curve 3.3.5 - From Household Demand to Market Demand 3.4 - Supply in Product/Output Markets 3.4.1 - Price and Quantity Supplied: The Law of Supply 3.4.2 - Other Determinants of Supply 3.4.3 - Shift of Supply versus Movement Along the Supply Curve 3.4.4 - From Individual Supply to Market Supply 3.5 - Market Equilibrium 3.5.1 - Excess Demand 3.5.1 - Excess Supply 3.5.1 - Changes in Equilibrium
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26 of 69 income The sum of all a household’s wages, salaries, profits, interest payments, rents, and other forms of earnings in a given period of time. It is a flow measure. Income And Wealth wealth or net worth The total value of what a household owns minus what it owes. It is a stock measure. 3.3.3 - Other Determinants of Household Demand 3.3 - Demand in Product/Output Markets
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27 of 69 normal goods Goods for which demand goes up when income is higher and for which demand goes down when income is lower. inferior goods Goods for which demand tends to fall when income rises. a) Income And Wealth 3.3 - Demand in Product/Output Markets 3.3.3 - Other Determinants of Household Demand
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28 of 69 substitutes Goods that can serve as replacements for one another. perfect substitutes Identical products. complements, complementary goods Goods that “go together”; a decrease in the price of one results in an increase in demand for the other and vice versa. b) Prices of Other Goods and Services 3.3 - Demand in Product/Output Markets 3.3.3 - Other Determinants of Household Demand
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29 of 69 c) Tastes and Preferences Changes in preferences can and do manifest themselves in market behavior. Within the constraints of prices and incomes, preference shapes the demand curve, but it is difficult to generalize about tastes and preferences. 3.3 - Demand in Product/Output Markets 3.3.3 - Other Determinants of Household Demand
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30 of 69 d) Expectations What you decide to buy today certainly depends on today’s prices and your current income and wealth. There are many examples of the ways expectations affect demand. Increasingly, economic theory has come to recognize the importance of expectations. It is important to understand that demand depends on more than just current incomes, prices, and tastes. 3.3 - Demand in Product/Output Markets 3.3.3 - Other Determinants of Household Demand
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31 of 69 3.1 - Firms and Households: The Basic Decision-Making Units 3.2 - Input Markets and Output Markets: The Circular Flow 3.3 - Demand in Product/Output Markets 3.3.1 - Changes in Quantity Demanded versus Changes in Demand 3.3.2 - Price and Quantity Demanded: The Law of Demand 3.3.3 - Other Determinants of Household Demand 3.3.4 - Shift of Demand versus Movement Along the Demand Curve 3.3.5 - From Household Demand to Market Demand 3.4 - Supply in Product/Output Markets 3.4.1 -
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