Term
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Definition
| A situation in which unlimited wants exceed the limited resources available to fulfill those wants. |
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Term
| Production Possibilites Frontier (PPF) |
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Definition
| A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology. |
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Term
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Definition
| The highest-valued alternative that must be given up to engage in an activity. |
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Term
| The more resources devoted to an activity... |
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Definition
| the smaller the payoff to devoting additional resources to that activity. |
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Term
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Definition
| The ability of the economy to increase the production of goods and services. |
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Term
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Definition
| The act of buying and selling. |
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Term
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Definition
| The ability of an individual, a firm, or a country to produce more of a good or service that competitors, using the same amount of resources. |
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Term
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Definition
| The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors. |
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Term
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Definition
| A group of buyers and sellers of a good or service an the institution or arrangement by which they come together to trade. |
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Term
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Definition
| Markets for goods--such as computers--and services--such as medical treatment. |
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Term
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Definition
| Markets for the factors of production, such as labor, capital, natural resources, and entrpreneurial ability. |
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Term
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Definition
| The inputs used to make goods and services. |
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Term
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Definition
| A model that illustrates how participants in markets are linked. |
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Term
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Definition
| A market with few government restrictions on how a good or service can be produced or sold or on how a factor of production can be employed. |
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Term
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Definition
| Someone who operates a business, bringing together the factors of production--labor, capital, and natural resources--to produce goods and services. |
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Term
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Definition
| The rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it. |
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Term
| Perfectly Competitive Market |
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Definition
| A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market. |
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Term
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Definition
| A table showing the relationship between the price of a a product and the quantity of the product demanded. |
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Term
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Definition
| The amound of a good or service that a consumer is willing and able to purchase at a given price. |
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Term
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Definition
| A curve that shows the relationship between the price of a product and the quantity demanded of the product. |
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Term
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Definition
| The demand by all the consumers of a given good or service. |
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Term
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Definition
| The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product with decrease. |
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Term
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Definition
| The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes. |
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Term
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Definition
| The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power. |
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Term
| Ceteris Paribus Condition |
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Definition
| "all else equal" The requirement that |
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Term
| Ceteris Paribus Condition |
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Definition
| "all else equal" The requirement that when analyzing the relationship between two variables--such as price and quantity demanded--other variables must be held constant. |
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Term
| Variables that Shift Market Demand |
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Definition
| Income, price of related goods, tastes, population and demographics, and expected future prices. |
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Term
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Definition
| A good for which the demand increases as income rises and decreases as income falls. |
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Term
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Definition
| A good for which the demand increases as income falls and decreases as income rises. |
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Term
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Definition
| Goods and services that can be used for the same purpose |
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Term
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Definition
| Goods and services that are used together. |
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Term
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Definition
| The characterisitecs of a population with respect to age, race, and gender. |
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Term
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Definition
| A shift in the demand curve if there is a change in one of the variables (other than price of the product) that affects the willingness of consumers to buy the product. |
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Term
| Change in Quantity Demanded |
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Definition
| Movement along the demand curve as a result of a change in the product's price. |
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Term
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Definition
| The amount of a good or service that a firm is willing and able to supply at a given price. |
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Term
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Definition
| The amount of a good or service that a firm is willing and able to supply at a given price. |
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Term
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Definition
| A table that shows the relationship between the price of a product and the quantity of the product supplied. |
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Term
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Definition
| A curve that shows the relationship between the price of a product and the quantity of the product supplied. |
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Term
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Definition
| The rule that, holding everything else constant, increases in price causes increases the quantity supplied, and decreases in price cause decreases in the quantity supplied |
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Term
| Variables that Shift Market Supply |
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Definition
| Price of inputs, technological change, prices of subsititutes in production, number of firms in the market, expected future prices. |
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Term
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Definition
| A positive or negaitve change in the ability of a firm to produce a given level of output with a given quantity of inputs. |
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Term
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Definition
| A situation in which quantity demanded equals quantity supplied. |
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Term
| Competitve Market Equilibrium |
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Definition
| A situation in which quantity demanded equals quantity supplied. |
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Term
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Definition
| A situation in which the quantity supplied is greated than the quantity demanded. |
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Term
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Definition
| A situation in which the quantity demanded is greater than the quantity supplied. |
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