Term
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Definition
| A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade. |
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Term
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Definition
| A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade. |
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Definition
| A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade. |
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| Involves comparing marginal benefits and marginal costs. |
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| The idea that because of scarcity, producing more of one good or service means producing less of another good or service. |
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| The highest-valued alternative that must be given up to engage in an activity. |
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| Centrally Planned Economy |
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Definition
| An economy in which the government decides how economic resources will be allocated. |
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Definition
| An economy in which the decisions of households and firms interacting in markets allocate economic resources. |
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Definition
| An economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources. |
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| The situation in which a good or service is produced at the lowest possible cost. |
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| A state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it. |
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| A situation that occurs in markets when both the buyer and seller of a product are made better off by the transaction. |
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Definition
| The fair distribution of economic benefits. |
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Definition
| Something measurable that can have different values, such as the wages of software programmers. |
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Definition
| Analysis concerned with what is. |
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Definition
| Analysis concerned with what ought to be. |
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Term
| Production Possibilities Frontier |
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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 ability of the economy to produce increasing quantities of goods and services. |
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Definition
| The act of buying or selling. |
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Definition
| The ability of an individual, firm, or a country to produce more of a good or service than competitors, using the same amount of resources. |
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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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Definition
| Markets for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability. |
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Definition
| The inputs used to make goods and services. |
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Definition
| Someone who operates a business, bringing together the factors of production to produce goods and services. |
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Definition
| Refer to 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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Definition
| 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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| Competitive Market Equilibrium |
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Definition
| A market equilibrium with many buyers and many sellers. |
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Definition
| Goods and services that are used together. |
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Definition
| A curve that shows the relationship between the price of a product and the price quantity of the product demanded. |
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Term
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Definition
| A tabled showing the relationship between the price of a product and the quantity of the product demanded. |
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Term
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Definition
| The characteristics of a population with respect to age, race, and gender. |
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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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Definition
| A good for which the demand increases as income falls, and decreases as income rises. |
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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 that product will decrease. |
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Term
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Definition
| The rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied. |
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Definition
| The demand by all the consumers of a given good or service. |
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Definition
| A situation in which quantity demanded equals quantity supplied. |
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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
| 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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Definition
| The amount of a good or service that a consumer is willing and able to purchase at a given price. |
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Definition
| The amount of a good or service that a firm is wiling and able to supply at a given price. |
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Definition
| A situation in which the quantity demanded is greater than the quantity supplied. |
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Term
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Definition
| Good and services that can be used for the same purpose. |
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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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Definition
| A curve that shows the relationship between the price of a product and the quantity of the product supplied. |
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Definition
| A positive or negative change in the ability of a firm to produce a given level of output with a given quantity of inputs. |
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Definition
| A market in which buying and selling take place at prices that violate government price regulations. |
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Definition
| The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays. |
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Definition
| The reduction in economic surplus resulting from a market not being in competitive equilibrium. |
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Term
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Definition
| A market in which buying and selling take place at prices that violate government price regulations. |
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Definition
| The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays. |
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Definition
| A market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum. |
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Definition
| The sum of consumer surplus and producer surplus. |
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Definition
| The additional benefit to a consumer from consuming one more unit of a good or service. |
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Definition
| The additional cost to a firm of producing one more unit of a good or service. |
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Definition
| A legally determined maximum price that sellers may charge. |
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Definition
| A legally determined minimum price that sellers may receive. |
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Definition
| The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives. |
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Term
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Definition
| The actual division of the burden of the tax between buyers and sellers in a market. |
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