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20 Cards in this Set
- Front
- Back
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Economies of Scale |
Increasingly efficient use of personnel, plant, and equipment as a firm becomes larger. |
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Mixed Economy |
Free enterprise market economy where people carry on their economic affairs freely, but are subject to some government intervention and regulation. |
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Market Economy |
Economic system in which supply, demand, and the price system help people make decisions and allocate resources; same as free enterprise economy. |
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Supply |
Schedule of quantities offered for sale at all possible prices in a market. |
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Demand |
Combination of desire, ability, and willingness to buy a product. |
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Equilibrium Price |
Price where quantity supplied equals quantity demanded; price that clears the market. |
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Monopolies |
Market structure characterized by a single producer; form of imperfect completion. |
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Diminishing Marginal Utility |
Decreasing satisfaction or usefulness as additional units of a product are acquired. |
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Utility |
Ability or capacity of a good or service to be useful and give satisfaction to someone. |
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Elasticity |
A measure of responsiveness that tells us how a dependent variable such as quantity responds to a change in the independent variable such as price. |
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Subsidy |
Government payment to encourage or protect a certain economic activity. |
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Diminishing Returns |
Stage of protection where output increases at a decreasing rate as more units of variable input are added. |
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Fixed Cost |
Cost of production that does not change when output changes. |
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Overhead |
Broad category of fixed costs that includes interest, rent, taxes, and executive salaries. |
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Variable Cost |
Production cost that varies as output changes; labor, energy, raw materials. |
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Marginal Cost |
Extra cost of producing one additional unit of production. |
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Equilibrium Wage Rate |
Wage rate leaving neither a surplus nor a shortage in the market. |
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Price Ceiling |
Maximum legal price that can be charged for a product. |
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Price Floor |
Lowest legal price that can be charged for a product. |
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Surplus |
Situation where quantity supplied is greater than quantity demanded at a given price. |
