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chapter 3,4,5
vocab
| Question | Answer |
|---|---|
| demand | amount of good or service a consumer is willing and able to buy at various possible prices given during a time period |
| law of demand | an increase in a goods price causes a decrease in the quantity demand and that a decrease in price causes an increase in the quantity demanded |
| purchasing powers | amount of money or income people have available to spend on goods and services |
| income efect | any increase or decrease in consumers purchasing power caused by a change in price |
| substitution effect | describes the tendecy of consumers to substitute a similar lower priced product for another prodcut that is relatively more expensive |
| diminishing marginal utilities | the natural decreases in the utility of a good or service when more units of it are consumed |
| demand schedule | lists the quantities of goods that consumers are willing and able to buy at a series of possible prices |
| demand curve | a way to show the relationship between the price of a product and the quantity demand |
| determinants of demand | non priced factor that influences the amount of demand for a good or service |
| substitute goods | goods that can be used to replace the purchase of similar goods when prices rise |
| conplimentary goods | goods that are commonly used with other goods |
| elasticity of demand | degree to which changes in a goods price affect the quantity demanded by consumers |
| law of supply | producers will supply more of a product or service at higher prices but less of a product or service at a lower price |
| profit motive | the desire to make money |
| cost of production | total cost of material, labor and other inputs required in the manufaturer of a product |
| supply curve | another way to show the relationship beteen the price of a good or service and the quantity supplied |
| determinat of supply | a non priced factor that influence the available supply of a good or service |
| tax | a required payment of money to the goverment to help fund goverment services |
| law of diminshing returns | the principle that as more of one input (such as labor) is added to a fixed supply of other resources (such as capital) for the productivity will increase up to a point after which the marginal product will diminish |
| overhead | the sum of a business's fixed costs except for wages and the marginal costs |
| variable cost | a cost of doing business that changes directly with a change in the level of output, typically rising and dropping as production increases and decreases |
| marginal cost | the cost of producing one additonal unit of output |
| market failure | a flaw in a price system that occurs when some costs have not been accounted for and therefore are not properly distributed |
| externality | an effect that an econimic activity has on people and businesses that are neither producers nor consumers of the good or service being produced on a externality may be either positive (beneficial) or negative ( harmful) |
| public good | any good or service that is consumed by all members of a group regardless of who has helped pay for it |
| market equilibrium | the point at which the quantity supplied and the quantity demand for a product equals at the same price |
| surplus | a situation in which the quantity supplied of an item at a given price exceeds the quantity demanded |
| shortage | a situation in which the quantity demanded for a good or resource exceeds the quantity supplied |
| price ceiling | a goverment regulation that sets a maximum price for a particular good |
| price floor | a goverment regulation that sets a minimum price for a particular good |
| minimum wage | the lowest hourly wage rate that an employer can legally pay a worker |
| rationing | a system by which a goverment or other institution that decides how to distribute a good or service; rationing is usually the result of a limited supply |
Created by:
simplyrosiie
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