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30 Cards in this Set
- Front
- Back
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Substitution effect
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when consumers react to an increase in a good's price by consuming less of that good and more of other goods
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Income effect
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the change in consumption resulting from a change in real income
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Demand schedule
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a table that lists the quantity of a good a person will buy at each different price
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Market demand schedule
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A table that lists the quantity of a good all consumers in a market will buy at each different price
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Demand curve
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A graphic representation of a demand schedule
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Normal goods
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A good that consumers demand more of when their incomes increase
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Inferior good
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A good that consumers demand less of when their incomes increase
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Complements
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Two goods that are bought and used together
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Substitutes
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Goods used in place of one another
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Elasticity of demand
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A measure of how consumers react to a change in price
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Inelastic
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Describes demand that is not very sensitive to a change in prices
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Elastic
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Describes demand that is very sensitive to a change in price
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Unitary elastic
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Describes demand whose elasticity is exactly equal to 1
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Total revenue
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The total amount of money a firm receives by selling goods or services
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Supply schedule
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A chart that lists how much of a good a supplier will offer at different prices
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Variable
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A factor that can change
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Market supply schedule
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A chart that lists how much of a good all supplier will offer at different prices
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Market supply curve
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A graph of the quantity supplied of a good by all suppliers at different prices
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Supply curve
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A graph of the quantity supplied of a good at different prices
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Elasticity of supply
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A measure of the way quantity supplied reacts to a change in price
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Marginal product of labor
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The change in outputnof hiringone additional unit of labor
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Increasing marginal returns
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A level of production in which the marginal product of labor increases as the number of workers increase
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Diminishing maginal returns
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A level of production in which the marginal product of labor decrease as the number of workers increases
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Fixed cost
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A cost that does not change,no matter how much of a good is produced
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Variable cost
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A cost that rises or falls depending on how much is produced
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Total cost
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Fixed costs plus variable costs
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Marginal cost
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The cost of producing one more unit of a good
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Marginal revenue
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The additional income from selling one more unit of a good;sometimes equal to price
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Operating cost
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The cost of operating a facility,such as a store or factory
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Subsidy
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A government payment that support a business or market
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