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47 terms

Unit 2 Econ

STUDY
PLAY
elasticity of demand
a measure of how people change their buying patterns when prices change
ceteris paribus
latin phrase "all other things held constant"
substitution effect
what happens when consumers react to an increase in a goods price by consuming less of that good and more of other goods
demand curve
graphic representation of a demand schedule
law of demand
a way that a change of price determines whether or not a consumer buys goods
inferior good
a good that consumers demand less of when income increases
complements
a good that is always used with an other good
normal good
a good that consumers will demand more of when their income increases
substitutes
a good that replaces another demand good
total revenue
the amount of money a company receives by selling goods and services
marginal costs
the cost of producing one more unit of a good
total cost
fixed costs plus variable costs
marginal revenue
the additional income from selling one more unit of a good
supply schedule
a chart that lists how much of a good a supplier will offer at different prices
variable
a factor that can change
regulation
government intervention in a market that affects the production of a good
marginal product of labor
the change in output from hiring on additional unit of labor
quantity supplied
the amount a supplier is willing and able to supply at a certain price
increasing marginal returns
a level at which the marginal production goes up with new investment
market supply curve
a graph of the quantity supplied of a good by all suppliers at different prices
rent control
government may hold down the price of apartments with...
disequilibrium
inequality between quantities supplied and demanded results in market...
supply
problem created when quantity supplied exceeds demand is excess...
price ceiling
government-imposed maximum charge for a good is a(n)...
surplus
quantities supplied in excess of quantities demanded result in a(n)...
price floor
government-imposed minimum for a good or service is a(n)...
equilibrium
when supply and demand meet at a particular price, the market is said to be at...
shortage
quantities demanded in excess of quantities supplied create a(n)...
rationing
dividing up scarce goods and services without concern for prices defines...
supply shock
economists call a sudden shortage of goods...
demand
problem created when quantity demanded exceeds supply is excess...
perfect competition
simplest market structure
oligopoly
market structure dominated by a few large profitable firms
deregulation
when government no longer decides each company's market role and pricing
license
grants firms control over scarce resources
barrier to entry
can cause difficulties in getting into the market
franchise
firm's right to sell its goods within an exclusive market
commodity
a product that is the same regardless of who makes or sells it
merger
joining of one firm with another to form a single firm
patent
exclusive rights to sell a new good or service for a specific period of time
start-up costs
expenses of a new business before product reaches the customer
natural monopoly
market structure that characterizes an industry run most efficiently by one large firm
collusion
oligopoly members' agreement on price and output
cartel
formal organization of producers that sets price and output
monopoly
single supplier in a given market
nonprice competition
competition based on differences other that pricing among products
price discrimination
charging special groups different prices