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Identifying ideas
| Demand | the amount of a good or service that consumers are willing and abled to buy at various prices during a given period |
| Law of demand | the principle, that all other factors being equal, consumers will purchase more of a good at lower prices and less of a good at higher prices |
| purchasing power | amount of income that people have available to spend on goods and services |
| income effect | the effect that a change in an items price has on consumers ability to purchase goods |
| substitution effect | consumers tendancy to substitute a lower price good for a similar higher priced one |
| deminishing marginal utility | natural decreases in the utility of a good or service as more units of it are consumed |
| demand schedule | a table that shows the level of demand for a paricular item at various prices |
| demand curve | a way to show the relationship between the price of a product and the quantity of demand |
| determinants of demand | non price factor that influences the amount of demand for a good or service |
| substitute goods | product that purchasers are in place of another product, particularly if the price of the other product rises |
| complementary goods | goods that are commonly used with other goods |
| elasticity of demand | the degree to which changes in the price of a good or service effect quality of demand |
| Law of supply | producers supply more good and services when they can sell them at higher prices and fewer goods and services when they must sell them at lower prices |
| profit motive | the desire to make money |
| cost of production | total costs of materials labor and other imputs required in the manufactur of a product |
| supply curve | a way to show a relationship between a prices of a good or service or the quantity of supply |
| determinant of supply | non price factor that influences the available supply of a good or service |
| tax | a required payment to a local, state, national government, usually made on some regular basis |
| law of diminishing returns | the effect that varrying the level of an input has on total and marginal product |
| overhead | the sum of a businesses fixed cost except for wages and the material cost |
| variable cost | cost of doing business that changes directly with a change in the level of output, tipically riseing and dropping as production increases and decreases |
| marginal cost | the cost of producing one additional unti of output |
| Market failure | a flaw in a price system that occurs when soome cost have not been accounted for and therefore are not properly distributed |
| externality | production of goods resulting for people not directly connected with the production or consumptionof the goods |
| public goods | any good or service that is consumed by all members of a group,regardless of who has helped pay for it |
| market equalibrium | point at which the quantity supplied and quantity demanded for a product are equal at the same price |
| surplus | situation in which the quantity supplied of an item and a given price exceeds the quantity demanded |
| shortage | situation in which the quantity demamnded of a good or resource exceeds the quantity supplied |
| price ceiling | government regulation that sets a max price for a particular good |
| price floor | government regulation that sets min price for particular good |
| minimum wage | lowest hourly wage rate that an employer legally can pay a worker,as established by a ferderal law |
| rationing | system by which a government or other institution decides how to distribute a good or service |
Created by:
bigg daddy
Popular Economics sets