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E59 20 New Words by LB
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Equilibrium
a state in a market or economic system where supply and demand are balanced, resulting in stable prices and quantities without pressure for change. ⚖️🤝🌐 | balance, stability, steadiness
Elasticity
a measure of responsiveness that indicates how much quantity demanded or supplied changes in response to price, income, or other factors. 📊📈🔄 | responsiveness, sensitivity, adaptability
Consumer Surplus
the difference between the maximum price consumers are willing to pay for a good or service and the actual price they pay, representing economic benefit to consumers. 💵😃💡 | economic gain, benefit, excess value
Producer Surplus
the difference between the minimum price producers are willing to accept for a good or service and the price they actually receive, representing economic benefit to producers. 🏭💰📈 | profit margin, economic gain, excess revenue
Deadweight Loss
a loss of economic efficiency that occurs when the equilibrium outcome is not achieved, often due to taxes, subsidies, or market distortions. 🚫💸📉 | inefficiency, economic loss, welfare reduction
Market Failure
a situation where free markets fail to allocate resources efficiently or fairly, leading to suboptimal outcomes and unmet needs. 🏚️❌🌍 | inefficiency, misallocation, economic dysfunction
Externality
a cost or benefit arising from an economic activity that affects third parties who are not directly involved in the transaction, often leading to market failure. 🌱🏭🌍 | spillover effect, side effect, third-party impact
Public Goods
goods or services that are non-excludable and non-rivalrous, meaning consumption by one person does not reduce availability to others, often requiring government provision. 🏛️🌍✨ | shared goods, collective goods, common goods
Monopoly
a market structure where a single seller controls the entire supply of a product or service, often resulting in higher prices and reduced competition. 🏢💵🔒 | market control, exclusive supplier, single-seller market
Oligopoly
a market structure where a few large firms dominate an industry, often leading to collusion, strategic pricing, and reduced competition. 🏢🏢🏢🤝💼 | concentrated market, few-seller market, shared dominance
Perfect Competition
a market structure where many buyers and sellers engage freely, products are homogeneous, and no single entity controls prices. 💼🏷️🤲 | pure competition, free market, competitive equilibrium
Monopolistic Competition
a market structure where many firms sell differentiated products, allowing some control over pricing but with competition due to substitutes. 🏪💡✨ | differentiated competition, imperfect competition, varied market
Game Theory
the study of strategic decision-making where participants anticipate and respond to others’ actions to maximize their own outcomes. ♟️🧠🔍 | strategic analysis, decision theory, interactive strategy
Nash Equilibrium
a concept in game theory where no player can benefit by unilaterally changing their strategy, given other players’ strategies remain unchanged. 🤝🔗📊 | strategic balance, optimal strategy, self-enforcing strategy
Prisoner's Dilemma
a scenario in game theory where individual rational choices lead to a suboptimal outcome for all participants, highlighting the conflict between individual and collective interests. 🚓🤷♂️🔒 | strategic conflict, trust dilemma, cooperation challenge
Utility
a measure of satisfaction or value that a consumer derives from consuming goods or services, guiding choices and preferences. 😊🛒💫 | satisfaction, value, preference
Indifference Curve
a graphical representation showing combinations of goods that provide a consumer with equal satisfaction or utility. 📊🎚️🌀 | equal satisfaction curve, preference map, utility curve
Budget Constraint
a representation of all combinations of goods and services a consumer can afford given their income and prices, illustrating trade-offs and choices. 💵📊🎚️ | spending limit, affordability curve, income constraint
Marginal Utility
the additional satisfaction or utility gained from consuming one more unit of a good or service, often decreasing with consumption. ➕😊📉 | additional value, incremental utility, extra satisfaction
Production Function
a mathematical relationship that shows how inputs are transformed into outputs in the production process, indicating efficiency and productivity. 🏭🔧📈 | output model, input-output relation, efficiency function