question
demand
answer
a relation showing the quantities of a good that consumers are willing and able to buy per period at various prices, other things constant
question
law of demand
answer
the quantity demanded of a good demanded per period relates inversely to its price, other things constant
question
marginal utility
answer
the change in total utility resulting from a one-unit change in consumption of a good
question
law of diminishing marginal utility
answer
the more of a good an individual consumes per period, other things constant, the smaller the marginal utility of each additional unit consumed
question
demand curve
answer
a curve or line showing the quantities of a particular good demanded at various prices during a given time period, other things constant
question
quantity demanded
answer
the amount demanded at a particular price
question
individual demand
answer
the demand of an individual consumer
question
market demanded
answer
the sum of the individual demands of all consumers in the market
question
elasticity of demand
answer
measures how responsive quantity demanded is to a price change; the percent change in quantity demanded divided by the percent change in price
question
total revenue
answer
price multiplied by the quantity demanded at that price
question
tastes
answer
a consumer's likes and dislikes
question
movement along a demand curve
answer
change in quantity demanded resulting from a change in the price of the good, other things constant
question
shift of a demand curve
answer
increase or decrease in demand resulting from a change in one of the determinants of demand other than the price of the good
question
supply
answer
a relation showing the quantities of a good producers are willing and able to sell at various prices during a given period, other things constant
question
law of supply
answer
the quantity of a good supplied during a given time period is usually directly related to its price, other things constant
question
supply curve
answer
a curve, or line, showing the quantities of a particular good supplied at various prices during a given time period, other things constant
question
movement along a supply curve
answer
change in quantity supplied resulting from a change in the price of the good, other things constant
question
shift of a supply curve
answer
increase or decrease in supply resulting from a change in one of the determinants of supply other than the price of the good
question
short run
answer
a period during which at least one of a firm's resources is fixed
question
long run
answer
a period during which all of a firm's resources can be varied
question
total product
answer
the total output of the firm per period
question
marginal product
answer
the change in total product resulting from a one-unit change in a particular resource, all other resources constant
question
law of diminishing returns
answer
as more of a variable resource is added to a given amount of other resources, marginal product eventually declines and could become negative
question
fixed cost
answer
any production cost that is independent of the firm's output
question
variable cost
answer
any production cost that changes as output changes
question
total cost
answer
the sum of fixed cost and variable cost
question
marginal cost
answer
the change in total cos resulting from a one-unit change in output; the change in total cost divided by the change in output
question
marginal revenue
answer
the change in total revenue from selling another unit of the good
question
economies of scale
answer
forces that reduce a firm's average cost as the firm's size, or scale, increase in the long run
question
long-run average cost curve
answer
a curve that indicates the lowest average cost of production at each rate of output when the firm's size is allowed to vary
question
market equilibrium
answer
when the quantity consumers are willing and able to buy equals the quantity producers are willing and able to sell
question
surplus
answer
at a given price, the amount by which quantity supplied exceeds quantity demanded; a surplus usually forces the price down
question
shortage
answer
at a given price, the amount by which quantity demanded exceeds quantity supplied; a shortage usually forces the price up
question
transaction costs
answer
the costs of time and information needed to carry out market exchange
question
increase in demand
answer
consumers are willing and able to buy more of the product at each price
question
decrease in demand
answer
consumers are willing and able to buy less of the product at each price
question
increase in supply
answer
producers are willing and able to sell more of the product at each price
question
decrease in supply
answer
producers are willing and able to sell less of the product at each price
question
productive efficiency
answer
occurs when a firm produces at the lowest possible cost per unit
question
allocative efficiency
answer
occurs when a firm produces the output most valued by consumers
question
disequilibrium
answer
a mismatch between quantity demanded and quantity supplied at the market seeks equilibrium; usually temporary, except when government intervenes to set the price
question
price floor
answer
a minimum legal price below which a product cannot be sold
question
price ceiling
answer
a maximum legal selling price above which a product cannot be sold
question
consumer surplus
answer
the difference between the most that consumers are willing and able to pay for a given quantity of a good and what they actually pay
question
behavioral economics
answer
an approach that borrows insights from psychology to help explain economic choices
question
bounded rationality
answer
there are limits to the amount of information people can comprehend and act on
question
limited willpower
answer
limited self-discipline in following through with decisions that are in one's self-interest, especially one's long-term interest
question
neuroeconomics
answer
the mapping of brain activity while subjects make economic choices to develop better models of economic decision making
question
demand is elastic if...
answer
> 1.0
question
unit elastic if...
answer
equal to 1.0
question
inelastic if...
answer
between 0 and 1.0
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
