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65 Cards in this Set
- Front
- Back
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price ceiling
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mamaximum legal price that can be charged for product
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minimum wage
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the lowest wage that can be legally pid to workers
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price floor
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lowest legal price that can be paid for a good or service
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target price
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a price floor for farm products
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nonrecource loan
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a loan that carries neithior a penalty nor further obligation to repay
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deficiency payment
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a check sent to producers that makes up the difference between the actual market price and the target price
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econimic model
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a set of assumptions that can be listed in a table/graph
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market equalibrium
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when prices are relatively stable and the quantity of goods is equal to the quantity demended
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surplus
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when the quantity supplied is greater than the quantity demanded
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shortage
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when the quantity demanded is greater than the quantity supplied
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equalibrium price
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price that "clears the market" by leaving neithor a surplus or a shortage
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price
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the value of a product as estimated by supply and demand
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rationing
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asystem under which the government decides everyones fair share
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ration coupon
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a ticket that entitles the holder to obtain a certain ammount of a product
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rebate
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a partial refund of the orgional price
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fixed cost
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the cost that a buisness incurs even if the plant is idle and output is 0
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overhead
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the total fixed cost
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varible cost
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a cost that changes when the buisness rate or operation or output changes
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total cost
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the sum of te fixed cost and varible cost
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marginal cost
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the extra cost incurred when a buisness produces one aditional unit of a product
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e-commerce
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electronic exchange conducted over the internet
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total revenue
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the number of units sold multiplied by the average price per unit
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mrginal revenue
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the extra revenue associated with the production and sale of one aditional unit of output
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marginal analysis
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cost-benefit decison making that compres exta benifits to extra costs
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breakeven point
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total output otr total product the buisness needs to sell in order to cover its costs
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profit-maximizing
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quantity of output is reached when marginal cost and marginal revenue are equal
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theroy of production
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the relantionship between the factors of production and the output of goods and services
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shortrun
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a period of production where producers can only change the labor
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longrun
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period of production long enough for producers to adjust the quantities of all their resources including capital
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law of variable proportions
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in the short run, output will change as one input is varied while others are held constant
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production function
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the relantionship between the changes that occur when the output is changed by a different ammount of single input, while other inputs are held constant
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raw materials
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natural products
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total product
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total output produced by the firm
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marginal product
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the exta output in total product caused by the addition of one more unit of varible input
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stages of production
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incresing returns, diminishing returns, negative returns
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diminishing returns
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the stage where output increses at a diminishing rate as more units of vaible input are added
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supply
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the amount of product offered at cerain prices in a market
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law of supply
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suppliers with offer more for sale at high prices and less at lower prices
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supply schedule
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listing of various quantities of a prduct supplied at all possible prices in a market
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supply curve
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a graph showing the supply schedule
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market supply curve
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the curve that shows the quantities offered at various prices by all firms that offer the product for sale
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quantity supplied
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the ammount that producers bring to the market
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change in quantity supplied
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the change in the ammount offered for sale in responce to a change in price
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change in supply
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a situation where suppliers offer different ammounts of products for sale at all possible prices
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subsidy
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gov. payment to an person, buisness to encourage econimic activity
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supply elasticity
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a measure of the way in which quantity supplied responds to a change in price
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elasticity
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a measure of responsiveness that tells us how a dependant variable such as quantity responds to change ina n independant variable such as price
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demand elasticity
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when a change in price causes a change in the quantity demanded
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elastic
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when a given change in price causes a realtively larger change in quantity demanded
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inelastic
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a given change in price causes a relatively smaller change in the quantity demanded
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unit elastic
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a change in price causes a proportional change in Quantity demanded
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change in Quantity demanded
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a movement along the demand curve that shows a change in the quantity of the product purchased in responce to a change in price
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substitution effect
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the change in quantity demanded b/c of the change in relative price of the product
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change in demand
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b/c people are willing to buy different ammounts of the product at the same prices
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substitutes
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they can be used in place of other products
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complements
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the use of one icreses the use of the other
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income effect
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the change in quantity demanded b/c of a change in price that alters consumers real income
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demand
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the desire, willingness, and abilty to buy a product
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microeconomics
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area of economics that deals with behavior and desision making by small units. Like individuals and firms
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demand schedule
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a listing that shows the various quantities demanded of a particular product at all prices that might prevail ina market
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demand curve
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a graph that shows the quantity demanded at every price
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law of demand
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the quantity demanded of a good varies inversly with its price
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market demand curve
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the demand curve that shows the quantities demanded by everyone who is interested in purchasing the product.
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marginal utility
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the extra usefulness a person gets from acquiring one or more unit of a product
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diminishing marginal utility
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the extra satisfaction we get from using an aditional quantities of the product begins to diminish
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