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ECO Topic 3 Pt 2
ECO Topic 3 Vocabulary Pt 2 Pearson 2016
| Term | Definition |
|---|---|
| fixed cost | a cost that does not change, no matter how much of a good is produced |
| variable costs | a cost that rises or falls depending on the quantity produced |
| total cost | the sum of fixed costs plus variable costs |
| marginal cost | the cost of producing one more unit of a good |
| operating cost | the cost of operating a facility, such as a factory or a store |
| average cost | total cost divided by the quantity produced |
| subsidy | a government payment that supports a business or market |
| excise tax | a tax on the production or sale of a good |
| regulation | government intervention in a market that affects the production of a good |
| equilibrium | the point at which the demand for a product or service is equal to the supply of that product or service |
| disequilibrium | any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market |
| shortage | a situation in which consumers want more of a good or service than producers are willing to make available at a particular price |
| surplus | when quantity supplied is more than quantity demanded |
| price ceiling | a maximum price that can legally be charged for a good or service |
| rent control | a price ceiling placed on apartment rent |
| price floor | a minimum price for a good or service |
| minimum wage | a minimum price that an employer can pay a worker for an hour of labor |
| inventory | the quantity of goods that a firm has on hand |
| search cost | the financial and opportunity costs that consumers pay when searching for a good or service |
| supply shock | a sudden shortage of a good |
| rationing | a system of allocating scarce goods and services using criteria other than price |
| black market | a market in which goods are sold illegally, without regard for government controls on price or quantity |
| barter | the direct exchange of one set of goods or services for another |
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cwarsing
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