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Needs are the basic and fundamental things that humans need to survive.


Large sum of money which people use to start a business or invest to make money.


Hard work, usually physical.


The branch of economics concerned with aggregates, such as national income, consumption and investment.


The branch of economics concerned with particular commodities, firms or individual.


The measurement of how changing one economic variable affects others.

Total revenue

Total receipts of a firm from the sale of any given quantity of a product.

Equilibrium Price

Price where supply and demand are equal.

Elastic demand

Change in price result in a greater change in demand.

Production Possibility Curve (PPC)

Line shows the different combinations of two goods an aconomy can produce if all resources are used up.

Diseconomies of scale

Average costs rise when a firm becomes too big.

Economies of scale

Average costs fall due to expansion of a firm.

Internal economies of scale

Cost benefit that an individual firm can have when it expands.


Size of business.

Minimum efficient scale (MES)

Size of plant when the average cost is minimized.

External econmoies of scale

Cost benefit that all firms in industry can have when it expands.

Average cost

Cost per unit of output (Total cost/Quantity produced)


Money used when producing goods or services

Fixed costs

Costs that do not vary with level of output.

Variable costs

costs that rise when output are increased.

Total cost

Fixed cost + Variable cost

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