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20 Cards in this Set
- Front
- Back
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Quantity Demand
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a term used economics to describe the total amount of goods or services that are demanded at any given point in time
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Demand
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the desire to own something and the ability to pay for it
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Substitution Effect
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when consumers react to an increase in a foods price by consuming less of that food and more of other foods
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Income Effect
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the changed in consumption resulting from a change in real income
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Normal Food
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a food that consumers demand more of when their incomes increase
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Inferior Good
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a food that consumers demand less of when their incomes increase
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Complements
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two foods that are bought and used together
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Substitutes
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foods used in place of each other
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Determinants of Demand
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consumer disposable income, price of substitutes, price of complements, consumer preferences, expectations about the future
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Determinants of Supply
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technology, factor prices, the number of suppliers, expectations of the future, and environmental conditions
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Elasticity
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describes demand that is very sensitive to a change in price
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Revenue
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income received by a government from taxes and nontax sources
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Equilibrium
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the point at which quantity demanded and quantity supplied are equal
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Price Ceiling
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a maximum prices that can be legally charged for a food or service
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Price Floor
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a minimum price for a food or service
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Minimum Wage
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a minimum price that an employer can pay a worker for an out of labor
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Surplus
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Extra
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Shortage
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a situation in which a food or service is unavailable or a situation in which the quantity demanded is greater than the quantity supplied, also known as excess demand
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Diminishing Marginal return
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a level of production which the marginal product of labor decreases as the numbers of workers increases
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Diminishing Marginal Utility
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economic theory that the perceived value of a product to a consumer declines with each additional unit acquired
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