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ECONOMIC TERMS3 .
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 |
IN-ELASTICITY | 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 GORES UP |
LAW OF DIMINISHING RETURNS | THE POINT WHERE OUTPUT IS STILL RISING, BUT AT A DIMINISHING RATE |
PRODUCTIVITY | USUALLY REFERS TO LABOR, HOW MUCH A PERSON CAN PRODUCE IN A CERTAIN AMOUNT OF TIME |
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 FAIR SHARE |
MARKET EQUILIBRIUM | QUANTITY OF GOODS DEMANDED EQUALS QUANTITY SUPPLIED |
SURPLUS | SITUATION WHERE QUANTITY SUPPLIED IS GREATER THAN QUANTITY DEMANDED AT A GIVEN PRICE |
SHORTAGE | QUANTITY DEMANDED IS GREATER THAN QUANTITY SUPPLIED AT A GIVEN PRICE |
EQUILIBRIUM PRICE | NEITHER A SHORTAGE NOR A SURPLUS, SUPPLY = DEMAND |
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 |
PATIENT | AN EXCLUSIVE RIGHT TO MAKE A PRODUCT |
COPYRIGHT | GIVES AUTHOR EXCLUSIVE RIGHT TO PUBLISH OR SELL (MUSIC, LITERATURE) |
PUBLIC GOODS | GOODS SUCH AS HIGHWAYS, POLICE ETC THAT EVERYONE USES |
PRIVATE GOODS | GOODS CONSUMED BY AND PAID FOR BY A PARTICULAR PERSON |