what is depreciation?
the diminishing of the value of goods
What are durable goods?
goods that are expected to last at least 3 years
What are nondurable goods?
goods that have a life expectancy of less than 3 years
define value in use
value that is directly related to the benefits their owners recieve through their use
defne Value in Exchange
what a particular good is worth in exchange for another good
What is the priciple of
diminishing marginal utility
as one 's supply of a specific good or service increases, the satisfaction derived from each additional unit tends to decrease
What is demand?
The relationship between a good's price and the amount that people are willing to buy
law of demand.
"other things remaining equal, as the price of a good increases, the quantity demanded decreases in a free market economy"
What is a demand curve?
a graphic representation of the amount of goods purchased at different prices.
What is a demand schedule?
a list of numbers that compares price with quantity demanded
what is a normal good?
a good whose demand in directly related to the consumer's income.
a list of numbers that compares price with quantity supplied
what is supply?
the relationship between a good's price and the amount that producers are willing to supply
what is state capitalism?
a system in which the owner of much of the nation's capitol is a powerful centralized
what is subsistence economy?
an economic system that provides barely enough to keep a society alive
what is a capitalist?
anyone who owns producer goods or owns a share of some business that produces goods
Chapters 4 and 5