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Three-year-old Adam lets out a piercing scream a few hours after he has fallen asleep. When his parents come to his room, Adam is sitting up in bed with his eyes open and in a state of panic, with a racing heart. Within 15 minutes, he has fallen back to sleep, and the next day he has no memory of the episode. Adam has experienced
Normal Goods
Goods for which demand increases as the income of individuals increases, indicating a positive relationship between income and demand.
Equilibrium Price
This is the price at which the quantity of goods supplied matches the quantity of goods demanded, resulting in market equilibrium.
Demand Curve
A graph depicting the relationship between the price of a good and the quantity demanded by consumers at those prices.
Ceteris Paribus
A Latin phrase meaning "all other things being equal," used in economics to isolate the effect of one variable by holding other influencing factors constant.
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