Unit 3 Economics Vocabulary

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Unit 3 - Irondale Economics Vocab

Economics

9th

30 Terms

1

Firms

an organization that uses resources to produce a product or service, which it then sells.

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2

Total Revenue

the total amount of money a company receives by selling goods or services

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3

Fixed Costs

a cost that does not change no matter how much of a good or service is produced (ex.rent, lease payments, machinery repairs)

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4

Variable Cost

a cost that rises or falls depending on the quantity produced (ex. Raw materials, wages for hourly workers, electricity and heating bills)

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5

Total Cost

the sum of fixed costs and variable costs (FC + VC = TC)

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6

Marginal Cost

the addition cost of producing one more unit

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7

Average Cost

the total cost divided by the quantity produced

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8

Profit

the amount of money a business receives in excess of its expenses (Total Revenue - Total Cost = Profit)

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9

Commodities

a product, such as petroleum or milk, that is considered the same no matter who produces or sells it

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10

Monopoly

a single seller controls the market

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11

Price discrimination

the division of consumers into groups based on how much they will pay for a good

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12

Monopolistic competition

a market structure in which many companies sell products that are similar but not identical (ex. jeans, t-shirts, bagel stores, gas stations)

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13

Oligopoly

a market structure in which a few large firms dominate a market (ex. air travel, automobiles, dishwashers)

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14

Antitrust law

laws that encourage competition in the marketplace to keep firms from controlling the price and supply of important goods

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15

Mergers

when two or more companies join to form a single firm

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16

Sole proprietorship

a business owned and managed by a single individual

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17

Liability

the legal obligation to pay debts

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18

Partnership

a business organization owned by two or more persons who agree on a specific division of responsibilities and profits

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19

Limited liability partnership

a type of partnership in which all partners are limited partners

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20

Business franchise

a semi-independent business that pays fees to a parent company in return for the exclusive right to sell a certain product or service in a given area

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21

Corporation

a legal entity owned by individual stockholders, each of whom has limited liability for the firm’s debts

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22

Dividends

the portion of corporate profits paid out to stockholders

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23

Cooperatives

a business organization owned and operated by a group of individuals for their shared benefit

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24

Nonprofits

an institution that functions much like a business but does not operate for the purpose of making a profit

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25

Labor supply

people willing to work for wages

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26

Equilibrium wage

the wage rate, or price of labor services, that is set when the supply of workers meets the demand for workers in the labor market

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27

Productivity of labor

the quantity of output produced by a unit of labor

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28

Labor union

an organization of workers that tries to improve working conditions, wages, and benefits for its members

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29

Collective bargaining

the process in which working people, through their unions, negotiate contracts with their employers to determine their terms of employment

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30

Shareholder/stockholder

person, company, or institution that owns at least one share of a company’s stock. Together, shareholders own the company.

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