Pre-DP definitions 1

Minimum price

A floor price set by the government on a good or service, below which it cannot fall. It may be enforced through government legislation.

public goods

Goods that are neither excludable nor rival in consumption

substitute goods

goods that can be used to replace the purchase of similar goods when prices rise

common pool resources

goods that are available to everyone, such as open ocean fisheries; it is difficult to exclude anyone from using the common pool, but one user's consumption reduces the amount available for others

barriers to entry

the cost or legal restrictions involved in a start up firm entering a market

Internalization

the social cost of a negative externality is internalized to be part of the cost of production

benefit to society

the benefit in monetary terms that a good with positive externalities gives to society

sustainable growth

economic growth and development that meet present needs without harming the needs of future generations

land

all natural resources used to produce goods and services

labour

productive work (especially physical work done for wages)

Capital

any human-made resource that is used to produce other goods and services

Entrepreneur

A person who organizes, manages, and takes on the risks of a business.

demand

the quantity of a good or service that consumers are willing and able to buy at a given price

supply

The quantity of something that producers have available for sale at a given price

surplus

A situation in which quantity supplied is greater than quantity demanded

shortage

A situation in which quantity demanded is greater than quantity supplied

equilibrium quantity

the quantity at which quantity demanded and quantity supplied are equal for a certain price level

Ceteris Paribus

a Latin phrase that means "all other things held constant"

Maximum price

A ceiling price set by the government on a good or service, above which it cannot rise. It may be enforced through government legislation.

Monopoly

A market in which there are many buyers but only one seller.

Oligopoly

A market structure in which a few large firms dominate a market

Merit goods

goods or services considered to be beneficial for people that would be under-provided by the market and so under-consumed

Demerit goods

goods or services considered to be harmful to people that would be over-provided by the market and so over-consumed.

positive externality

a benefit that is enjoyed by a third-party as a result of an economic transaction

negative externality

a cost that is suffered by a third party as a result of an economic transaction

Cost to society

the additional cost that a demerit good added to society

tax

a required payment to a local, state, or national government

Quota

a limited or fixed number or amount of people or things, in particular.

monopolistic competition

a market with many firms competing against each other making slightly different products

perfect competition

a market structure in which a large number of firms all produce the same product