What a Giffen good is — a good where demand increases as price increases (very rare)

What a Veblen good is — a luxury good where higher price increases desirability

A Veblen good is a luxury item whose demand increases as its price rises, due to perceived exclusivity

What deflation causes — falling prices discourage spending as consumers wait for cheaper goods

Deflation leads to decreased consumer spending due to anticipated lower prices

What the endowment effect causes — you value what you own more than what you don't

The endowment effect leads to overvaluation of owned items compared to identical alternatives

What supply and demand equilibrium is — the price where quantity supplied equals quantity demanded

Price at which market clears, Qs = Qd

What the labor theory of value claims — the value of a good equals the labor required to produce it

Labor theory posits: Good's value equals production labor

What anchoring does in investing — the purchase price biases your sell decision

Anchoring bias causes investors to base sell decisions on initial purchase price rather than current market value