Chap 4-7 Vocab In Econ

Front 1

Demand

Back 1

desire, ability, & willingness 2 buy a product

Front 2

microeconomics

Back 2

area of economics tht deals w behavior &decision making by small units such as individuals and firms

Front 3

demand schedule

Back 3

listing tht shows various quantities demanded of a particular product at all prices tht mght prevail n market at a given time

Front 4

demand curve

Back 4

grph shwing quantity demanded at each and evry price tht mght prevail in market

Front 5

law of demand

Back 5

quantity of a good or service demanded varies inversely w it's price

Front 6

market demand curve

Back 6

demand curve tht shws quantities demanded by evry1 who is interesetd n purchasing the product

Front 7

marginal utility

Back 7

extra usefulness or satisfaction a persons gets frm acquiring or usin 1 more unit of a product

Front 8

diminishing marginal utility

Back 8

xtra or additional satisfaction received frm using additional quantities of the product begins 2 diminish

Front 9

change in quantity demanded

Back 9

movement alng demand curve tht shws a chng n quantity of product purchased n response 2 a chng n price

Front 10

income effect

Back 10

chng n quantity demanded b/c of a chnge n price tht alters consumers' real income

Front 11

substitution effect

Back 11

chng n quantity demanded b/c of chng n relative price of product

Front 12

change in demand

Back 12

demand increases or decreases bc ppl r willing 2 buy diff. amounts of product at same price

Front 13

substitutes

Back 13

products used in place of other products

Front 14

complements

Back 14

related goods where the use of one increases the use of the other

Front 15

elasticity

Back 15

measure of responsiveness tht tells hw a dependent variable such as quantity responds 2 a chng n an independent varible such as price

Front 16

demand elasticity

Back 16

extent to which a chnge in price causes a chnge n quantity demanded

Front 17

elastic

Back 17

given chng in price causes a relatively larger chng n quantity demanded

Front 18

inelastic

Back 18

given chng n price causes a realtively smaller chng n quantity demanded

Front 19

unit elastic

Back 19

given chng n price causes a proportional chng n quantity demanded

Front 20

supply

Back 20

amount of a product tht wlf b offered for sale at all possible prices tht cld prevail n market

Front 21

law of supply

Back 21

principal tht suppliers will normally offer more for sale at hgh prices and less at lower prices

Front 22

supply schedule

Back 22

listing of vaious quantities of a particular product supplied at all possible prices n market

Front 23

supply curve

Back 23

graph shwing various quantities supplied at each and every price tht mght prevail n market

Front 24

market supply curve

Back 24

supply curve tht shws quantities offered at various prices by all firms tht offer product 4 sale n a givn market

Front 25

quantity supplied

Back 25

amount tht producers brng to market at any given price

Front 26

change in quantity supplied

Back 26

chng n amount offered for sale n response to a chnge n price

Front 27

change in supply

Back 27

situation where suppliers offer diff. amounts of products 4 sale at all possible products n market

Front 28

subsidy

Back 28

gov. payment 2 an invdividual, business, or othr grp 2 encourage or protect a certain type of economic activity

Front 29

supply elasticity

Back 29

measure of the way in which quantity supplied responds 2 a chng n price

Front 30

theory of production

Back 30

relationship between factors of production and the output of goods and services

Front 31

short run

Back 31

period of production tht allows producers to chng only the amountof varible input called labor

Front 32

long run

Back 32

period of production longenough for producers to adjust the quantities of all its resources, including captial

Front 33

law of variable proportions

Back 33

in shrt run, output will chng as 1 input is varied while the othrs are hld constant

Front 34

production function

Back 34

a concept tht describes relationship btwn chngs n output to diff amounts of a single input while othr inputs r hld constant

Front 35

raw materials

Back 35

unprocessed natural products used in production

Front 36

total product

Back 36

total output produced by a firm

Front 37

marginal product

Back 37

xtra output or chng n total product caused by the addition of one more unit of variable input

Front 38

stages of production

Back 38

increasing returns, diminshing returns, and negative returns

Front 39

diminishing returns

Back 39

stage where output increases at a diminishing rate as more units of a varible are added

Front 40

fixed cost

Back 40

cost tht a business incurs even if the plant is idle and output is zero

Front 41

overhead

Back 41

total fixed cost

Front 42

variable cost

Back 42

cost tht chngs when the business rate of operation or output chnges

Front 43

total cost

Back 43

sum of fixed and variable costs

Front 44

marginal cost

Back 44

xtra cost incurred when a business produces 1 additional unit of a product

Front 45

e-commerce

Back 45

electronic business or xchng conducted ovr internet

Front 46

total revenue

Back 46

# of units sold multiplied by average price per unit

Front 47

marginal revenue

Back 47

xtra revenue associated w production & sale of 1 additional unit of output

Front 48

marginal analysis

Back 48

type of cost-benefit decision makin tht compares the xtra benefits 2 xtra costs of an action

Front 49

break-even point

Back 49

total output ot total product the business need to sell in order to cover its total costs

Front 50

profit-maximizing quantity of output

Back 50

situation tht exists when marginal costs and marginal revenue are equal

Front 51

price

Back 51

monetary value of a product as established by supply and demand

Front 52

rationing

Back 52

system under which an agency such as government decides everyone's fair share

Front 53

ration coupon

Back 53

ticket or receipt tht entitles the holder 2 obtain a certain amount of a product

Front 54

rebate

Back 54

partial refund of the origional price of the product

Front 55

economic model

Back 55

set of assumptions and/or relationships tht can b listed n a tbl, illistrated w a graph, or even stated algebraically

Front 56

market equilibrium

Back 56

prices r relatively stable, and the quantity of goods and services is = 2 the quantity demanded

Front 57

surplus

Back 57

quantity supplied if greater thn the quantity demanded at a given price

Front 58

shortage

Back 58

quantity demanded is greater than the quantity supplied at a given price

Front 59

equilibrium price

Back 59

price tht "clears the market" by leaving neither a surplus nor a shortage at the end of the trading period

Front 60

price ceiling

Back 60

max legal price tht can b charged for a product

Front 61

min. wage

Back 61

lowest legal wage tht can b paid to most workers

Front 62

price floor

Back 62

lowest legal price tht can b paid for a good or service

Front 63

target price

Back 63

price floor for farm products

Front 64

nonrecourse loan

Back 64

loan tht carries neither a penalty nor further obligation to repay if not paid back

Front 65

deficiency payment

Back 65

check sent to producers tht makes up the differecne btwn actual market price and target price

Front 66

laissez-faire

Back 66

philosophy tht gov. shld not interfere w/ commerce or trade

Front 67

market structure

Back 67

nature and degree of competition among firms operating in the same industry

Front 68

perfect competition

Back 68

competition characterized by a large # of well-informed independent buyers and sellers who exchng identical products

Front 69

imperfect competition

Back 69

name given ti a market structure tht lacks 1 or more of the conditions of perfect competition

Front 70

monopolistic competition

Back 70

market structure tht has all conditions of perfect competiton except for identical products

Front 71

product differentiation

Back 71

real or imagined differences between competing products in the same industry

Front 72

nonprice competition

Back 72

use of advertisin, giveaways, or othr promotional campaigns 2 convince buyers tht the product is somehow bttr thn anthr brand.

Front 73

oligopoly

Back 73

a market structure in which a few very large sellers dominate the industry

Front 74

collusion

Back 74

formal agreement to set prices or to otherwise behave in a cooperative manner

Front 75

price-fixing

Back 75

agreeing to charge the same or similar prices for a product

Front 76

monopoly

Back 76

market structure with only one seller of a particular product

Front 77

natural monopoly

Back 77

market situation where sots r minimized by having a single firm produce a product

Front 78

economies of scale

Back 78

situation in which the average cost of production falls as the firm gets larger

Front 79

geographic monopoly

Back 79

a monopoly based on the absence of other sellers in a certain geographic area

Front 80

technological monopoly

Back 80

monopoly based on ownership or control of a manufacturing method, process, or other scientific advance

Front 81

government monopoly

Back 81

monopoly the government owns and operates.

Front 82

market failure

Back 82

event tht can occur w/ inadequate info, resource immobility, external economies, and public goods

Front 83

externality

Back 83

unintended side effect tht either benefits or harms 3rd party not involved n the activity tht caused it

Front 84

negative externality

Back 84

unwanted harm, cost, or inconvenience suffered by a 3rd party b/c of actions by othrs.

Front 85

positive externality

Back 85

benfit received by someone who had nothing to do with the activity that generated the benefit

Front 86

public good

Back 86

product thts collectively consumed by everyone, & whose use by 1 individual dsnt diminsh satisfaction or value received by othrs

Front 87

trust

Back 87

legally formed combo of corps. or companies

Front 88

price discriminiation

Back 88

practice of charging customers difference prices for the same product

Front 89

cease and desist order

Back 89

Federal trade Commission ruling requiring a company 2 stp an unfair business practice, such as price-fixing, tht reduces or limits competition amng firms

Front 90

public disclosure

Back 90

requirement tht businesses reveal info to the public