10 Economics Words

Absolute advantage: means being able to do something using fewer resources than other produces require Antitrust Laws: attempt to promote competition and reduce anticompetitive behavior Barter: a system of exchange in which products are traded directly for other products Competitive Firm’s Supply Curve: rising portion of a firms marginal curve Capital Goods raw materials used to produce finished products Cash Transfer Programs: provides cash to poor families with dependent goods and services Demand: goods that consumers are willing and able to buy at a price Demand Curve: total utility from consuming unit curve in which demand is expressed Division of Labor: sorts the production process into separate skills to be carried out Economics: Study of the production, distribution , and consumption of wealth, and various problems related to labor Economic Growth: an outward shit of the product possibility frontier Economies of Scale: forces that reduce a firm’s average cost in long run Economic System: set of mechanisms & institutions that resolves the what how and for whom questions Economic Theory: Simplification of economic reality used to make predictions about the real world Efficiency: means producing the maximum possible output from available resources Elasticity of Demand: measures how responsive quantity is to a price change. % in quantity/% change in price. Elasticity of Supply: measure of responsiveness of quantity supplied to a price change Entrepreneur Person who organize and manage businesses and take risks owning them Firm: a business unit or enterprise formed by a profit seeking entrepreneur Fiscal Policy uses taxing and public spending to influence national economy Fixed Cost: any production costs independent of the firms output Good: something you can touch and hold in your hand Household most important economic decision maker Human Resources: people, staff that deals with the business Income Assistance Programs: provide money and in kind assistance to poor people Individual Demand: demand of individual consumer Industrial Revolution: development of large scale production during the eighteenth century In-kind Transfer Programs: health care and housing assistance Labor: all of the people who work in the economy Law of Comparative Advantage: the worker with the lower opportunity cost of producing a particular output Law of Demand: quantity of a good demanded per period varies inversely with its price Law of Diminishing Marginal Utility: the more of a good a person consumes per period, the smaller Law of Diminishing Returns as more old resources give in to new resource the marginal produce eventually declines Law of Increasing Opportunity Cost states that each additional increment of one good requires the economy to give up other goods Law of Supply :quantity of good supplied during given time periods usually directly related to price Long Run: a period during which all resources can be varied Long-Run Average Cost Curve lowest average cost at each rate of output Marginal: barely able to cover the cost of production when sold or producing goods for sale Marginal Cost: unit change in output cost divide by total change Marginal Product: from one unit change in a particular resource Marginal Revenue: change in total revenue from selling another unit of good Marginal Utility the change in total utility resulting in a one-unit change in consumption of a good Market place where goods are offered for sale Market Demand: sum of individual demands Market Economics: economic system in which the production & distribution of gods take place in free market enterprise Median Income: household income rated lowest to highest Mixed Economies economic system that allos for simultaneous operation of publicy & privately owned businesses Money: coins, bills, and something as a medium of exchange Monetary Policy: tries to supply the appropriate amount of money to help stabilize the business cycle and promote healthy economic growth. Movement Along the Demand Curve: change in quantity demanded resulting from change in price Movement Along the Supply Curve: change in quantity supplied resulting from a change in price of goods National Economics: study of economic behavior of the economy as a whole, especially nationally Natural Monopoly: when its cheaper for one firm to serve the market than for two firms Natural Resources: Things that occur in nature that can be used to create wealth Negative Externalities: or consumption that imposes cost on third parties Open Access Goods: goods that are rival but non exclusive Opportunity cost value of the best alternative passed up for the chosen item Positive Externalities: benefit third parties Production Possibilities Frontier: given all the resources and technology available Private Goods rival in consumption and exclusive Private Property Rights guarantee individuals right to use their resources as they choose or charge others for use Productive Resources generate goods and services Pure centrally Planned Economy an economy in which total direction & development is planned Pure Market Economy economy in which pure competition prevails Public Goods are available to all in equal amount and marginal cost Quantity Demanded amount demanded at particular price Quasi Public Goods goods that are non rival but exclusive Scarcity The difference between wants and needs and available resources Service performance of duties for those who paid for it Shift Of a Demand Curve increase of decrease resulting from one of the determinants Shift of A Supply Curve increase or decrease of supply resulting from change in one of the supply determinants other than price Short Run period during which at least one of a firm resources is fixed Social Insurance programs designed to help income of retired people Specialization individual workers focus on individual tasks Sunk cost cost you’ve already paid and can’t recover

Supply relationship showing the quantities of a good producers are wiling to sell at a given period in relation to price Supply Curve curve showing the quantities of a particular good supplied at various prices Traditional Economies an underdeveloped economy in which primitive tools are harvesting in limited economic growth Transitional Economies an economy that is changing from a centrally planned to free market economy Tastes consumer preferences Total Cost sum of fixed cost and variable cost Total Product total output of the firm Total Revenue price multiplied by the quantity demanded at price Utility the level of satisfaction from consumption or sense of well being Variable Cost any production cost that changes as output changes