Economic Basic Vocab

Front 1

supply

Back 1

the amount of a material availible for use

Front 2

demand

Back 2

the quantity that the consumers would purchase at a selected price

Front 3

GDP

Back 3

Gross Domestic Product

Front 4

interest

Back 4

the amount paid to a lender for a loan

Front 5

opportunity cost

Back 5

what is lost when you choose one option over another

Front 6

Aggregate demand

Back 6

the total amount demanded of the economy

Front 7

consumption expenditure

Back 7

the amount of money spend by household consumers

Front 8

investment expenditure

Back 8

money spent on firms to invest in new technology, ect.

Front 9

government expenditure

Back 9

amount spent by government that comes from treasury

Front 10

Aggregate supply

Back 10

total amount produced at given prices

Front 11

microeconomics

Back 11

The decisions made by an individual consumer or company.
Ex. Midwest Airlines, Jiffy Lube

Front 12

Macroeconomics

Back 12

the overall economy, decisions made by a whole industry.
Ex. Airlines, Car Repair/Maintenence

Front 13

scarcity

Back 13

at any one time, an economy has a limited power over resources, limited output

Front 14

oppurtunity cost

Back 14

there is a limited amount of resources so when decisions are made towards one thing, the ability to make another is gone

Front 15

optimization

Back 15

people try to reach a goal or become optimized naturally

Front 16

implicit market

Back 16

individuals work together for mutual benefit

Front 17

stable preferences

Back 17

humans have certain goals and preferences that they have the urge to satisfy

Front 18

utility function

Back 18

self, or description of what is important to a person

Front 19

bounded rationality

Back 19

try not to optimize but to satisfy

Front 20

market

Back 20

economy where forces of supply and demand determine goods and prices

Front 21

command

Back 21

economy where central planning committee decide goods and prices

Front 22

mixed economy

Back 22

mix of command and market economy

Front 23

land

Back 23

any none produced item. any item not manmade used in production

Front 24

input

Back 24

the items put into production

Front 25

capital

Back 25

any previously processed item used in production

Front 26

output

Back 26

consumer goods and services produced

Front 27

law of increasing relative cost

Back 27

more of something produced, more it costs to produce it

Front 28

trade off

Back 28

give up some of one thing to get more of another

Front 29

elasticity of demand

Back 29

measure quanity demanded as the price changes

Front 30

barter system

Back 30

producer finds someone whose needs and supplies are the opposite. Person 1 has A and needs B. Person 2 has B and needs A.

Front 31

demand curve

Back 31

negative slope because relationship is inverse

Front 32

supply curve

Back 32

positive slope because of direct relationship

Front 33

equilibrium

Back 33

the amount of product produced equals amount demanded.

Front 34

shortage

Back 34

when demand is greater than amount produced

Front 35

surplus

Back 35

when amount produced is greater than demand

Front 36

substitute goods

Back 36

a similiar good bought when the original is priced too high

Front 37

complementary

Back 37

when something goes down in price and something that goes with it increase in price.
Ex. Price of tennis racket decreases but price of tennis balls increase

Front 38

law of demand

Back 38

the amount demand will change with a change in price

Front 39

elastic change in demand

Back 39

when the change in amount demanded is greater than the change in price

Front 40

inelastic change in demand

Back 40

when the change in price is greater than change in demand

Front 41

unitaryelastic change in demand

Back 41

change in price equals change in demand

Front 42

monopoly

Back 42

only one seller with a unique product

Front 43

monopolistic competition

Back 43

many producers and sellers, but with slightly different products

Front 44

oligopoly

Back 44

few producers and sellers with differen or same products

Front 45

total revenue

Back 45

price x quantity

Front 46

marginal revenue

Back 46

additional revenue for each additional unit sold

Front 47

GNP

Back 47

Gross National Product. all goods and services produced in a year

Front 48

value added approach of finding GNP

Back 48

makes products=price-cost of product needed to produce them

Front 49

depreciation

Back 49

allowance for replacing worn out capital

Front 50

macroeconomics theory

Back 50

why economy expands and contracts

Front 51

aggregate demand curve

Back 51

inverse relationship between price and planned expenditures

Front 52

aggregate supply curve

Back 52

inverse relationship between price and real output

Front 53

recession

Back 53

when output drops below potential

Front 54

stable prices

Back 54

prices and wages remain the same

Front 55

net interest

Back 55

all interest paid. Total interest