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Basic Econ Terms V
| Question | Answer |
|---|---|
| Demand | The desire |
| Microeconomics | The area of economics that deals with behavior and decision making by small units such as individuals and firms |
| Demand Schedule | A listing that shows the various quantities demanded of a particular product at all prices that might prevail in the market at a given time |
| Demand Curve | A graph showing the quantity demanded at each and every price that might prevail in the market |
| Law of Demand | The quantity of a good or service demanded varies inversely with its price |
| Marginal Utility | The extra usefulness or satisfaction a person gets from acquiring or using one more unit of a product |
| Diminishing Marginal Utility | The extra or additional satisfaction received from using additional quantities of the product begins to decline |
| Income Effect | The change in the quantity demanded because of the change in price that alters consumer's real income |
| Substitution Effect | The change in the quantity demanded because of the change in the relative price of the product |
| Substitutes | Products used in place of other products |
| Complements | Related goods where the use of one increases the use of the other (and vice versa) |
| Elasticity | A measure of responsiveness that tells how a dependent variable such as quantity responds to a change in an independent variable such as price |
| Elastic | A given change in price causes a relatively larger change in quantity demanded |
| Inelastic | A given change in price causes a relatively smaller change in the quantity demanded |
| Unit Elastic | A given change in price causes a proportional change in quantity demanded |
| Supply | The amount of a product that would be offered for sale at all possible prices that could prevail in the market |
| Law of Supply | The principle that suppliers will normally offer more for sale at high prices and less at lower prices |
| Supply Schedule | A listing of various quantities of a particular product supplied at all possible prices in the market |
| Supply Curve | A graph showing the various quantities supplied at each and every price that might prevail in the market |
| Subsidy | A government payment to an individual |
| Raw Materials | Unprocessed natural products used in production |
| Diminishing Returns | The stage where output increases at a declining rate as more units of a variable are added |
| Fixed Cost | The cost that a business incurs even if the plant is idle and output is zero |
| Overhead | Total fixed cost |
| Variable Cost | A cost that changes when the business rate of operation or output changes |
| Marginal Cost | The extra cost incurred when a business produces one additional unit of a product |
| Total Revenue | The number of units sold multiplied by the average price per unit |
| Break-Even Point | The total output or total product the business needs to sell in order to cover its total costs |
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ugotkmn