How can we help?

You can also find more resources in our Help Center.

53 terms

ECO CHAPTERS 4-6

STUDY
PLAY
demand
the desire to own something and the abilit to pay for it
law of demand
consumers buy more of a good when its price decreases and less when its price increases
subsitution effect
when consumers react to an increase in good's price by consuming less of that good and more of other good
income effect
the change in consumpition resulting from a change in real income
demand schedule
a table that lists the quantity of a good a person will buy at each different price
market economy schedule
a table that lists the quantity of a good all consumers in a market will buy at each different price
demand curve
a graphic representation of a demand schedule
ceteris paribus
a latin phrase that means "all other things held constant"
normal good
a good that consumers demand more of when their incomes increase
inferior good
a good that consumers demand less of when their incomes increase
complements
two goods that are bought and used together
subsitutes
goods used in place of one another
elasticity of demand
a measure of how consumers react to a change in price
inelastic
describes demand that is not very sensitive to a change in price
elastic
describes demand that is very sensitive to a change in price
unitary elastic
describes ddemand whose elasticity is exactly equal to 1
unitary elastic demand
a special case. when demadn is unitary elastic, an increase (or decrease) in price will be met by an equal percentage decrease ( or incerase) in quantity demanded. Elasticity of dmeand is exactly 1.
total revenue
the total amount of money a firm recieves by selling goods or services
supply
the amount of goods available
law of supply
tendency of suppliers to offer more of a good at a higher price
quantity supplied
the amount a supplier is willing and able to supply at certain price
supply chedule
a chart that lsits how much of a good a supplier will offer at different prices
variable
a factor that can change
market supply schedule
a chart that lists how much of a good all suppliers will offer at different prices
supply curve
a graph of the quantity supplied of a good at diffrerent prices
market supply curve
a graph of the quantity suplied of a good by all suppliers at different prices
elasticity of supply
a measure of the way quantity supplied reacts to a change in price
marginal product of labor
the change in outpit from hiring one additional unit of labor
increasing marginal returns
a level of production in which the marginal product of labor increases as the number of workers increases
diminishing marginal returns
a levl of production in which the marginal product of labor decreases as the number of workers increases
fixed cost
a cost that does not change, no matter how much of a good is produced
variable cost
a cost that does change
total cost
fixed costs plus variable costs
marginal cost
the cost of producing one more unit of a good
marginal revenue
the additional income from selling one more unit of a good; sometimes equal to price
operating cost
the cost of operating a facility, such as a store or factory
subsidy
a govt payment that supports business or market
excise tax
tax on production or sale of good
regulation
govt intervention in a market that affects the production of a good
equilibrium
the pouint at which quantity demanded and quantity supplied are equal
disequilibrium
describes any price or quantity not at equliibrium; when quantity supplied is not equal to quantity demanded in a market
excess demand
when quantity demanded is more than quantity supplied
excess supply
when quantity supplied is more than quantity demanded
price ceiling
max price that can be legally charged for good or service
price flo!
min price for good or service
rent control
price celing placed on rent
min wage
a min price that an employer can pay a worker for an hour of labor
surplus
situation in which quantityh supplied is greater than quanity demanded aka excess supply -_-
shortage
situation in which quantity demanded is greater than quantity supplied aslo known as excess demand
search costs
the financial and opportunity costs consumers pay wehn searching for a good or service
supply shock
sudden shortage of good
rationinig
system of allocating scarce goods and services using criteria other than price
blakc market
market in which goods are sold illegally