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Economics 3 mp
Term | Definition |
---|---|
Bond | a formal contract to repay borrowed money and interest at regular future intervals |
Diminishing marginal utility | the more units of something that a person aquires, the less eager that person is to buy more |
Demand elasticity | the extent to which a change in price affects demand |
Inelasticity | price has very little affect on demand |
Law of demand | people will be willing and able to buy more of a product at a lower price |
Law of supply | sellers will be willing to supply more goods for sale when their price goes up |
Law of diminishing returns | the point where the output is still rising, but at a diminishing rate |
Productivity | usually refers to labor, |
Fixed cost | cost that a business incurs even if they produce no product |
variable cost | a cost that changes when the rate of output changes |
depreciation | the gradual wearing out of capital goods |
price | amount of money that people pay in exchange for a unit of good or service |
rationing | a system in which the government decides everyone's fair share |
marker equilibrium | quantity of goods demanded equals quantity supplied |
surplus | situation where quantity supplied is greater than quantity demanded at a given price |
shortage | situation where quantity supplied is greater than quantity supplied at a given price |
equilibrium price | neither a shortage nor a surplus, supply |
oligopoly | few sellers of the same product |
monopoly | one seller of a product with no close substitutes |
natural monopoly | situation where costs are minimized by having one large firm provide the product or service |
economies of scale | the larger a firm grows, the better it uses it's resources |
patent | an exclusive right to make a product |
copyright | gives author exclusive right to publish or sell |
public goods | goods such as highways, police etc that everyone uses |
private goods | goods consumed by and paid for by a particular person |