Mircoeconomics

absolute advantage

the advantage conferred by the ability to produces more of a good or service with a given amount of time and resources

accouting proftt

a business's total revenue minus the explicit cost and deprecations

allocative efficiency

achieved yb an economy if it produced at the point long its production possibilities curve that makes consumers ass well of as possible

average fixed cost

the fixed cost per unit of output

average total cost

total cost divided by quantitiy of output produced

average variable cost

the variavle cost per unit of output

capital

manufactured goods us to maker other goods and services

cartel

a group of producers that agree to restirct output in order to increase prices and their joint profits

comparative advantage

the advantage conferred by an induvidual if the opportunity cost of producing the good or service is lower for that individual

complements

two goods (often consumed together) for which a rise in the price of one of the goods leads to a decrease in the demand for the other good

consumer surplus

the net gain recieved from purchasing a good or service

deadweight loss

the value of foregone mutually beneficial transactions; (from a tax) the decrease in total surplus resultung fro the tax minus the tax revenues generated

diminishing marginal product

the phenomenon where the more input that is employed in a production process the lesser the margin of extra output obtained

diseconomies of scale

when long-run average total cost increases as output increases

economic profit

a business's total revenue minus the opportunity cost oif its resources; usually less than accounting profits

economies of scale

when long-run average total cost declines as output increases

Elasticity

an economic concept used to measure the change in the aggregate quantity demanded of a good or service in relation to price movements of that good or service

explicit costs

a cost that involves actually laying out money

factors of production

land, labor, capital, entrepreneurship

fixed costs

a cost aht does not depend on the quantity of output produced: the cost of the fixed input

implicit costs

a cost that does not require an outlay of money; it its measutred by the value of benefits that are foregone

income effect

the change in the quantity of a good demanded that results from a change in the consumer's purchasing power when the price of the good changes

inferior good

when a rise in income decreasses the demand for a good; an inferior good is susally considered less desirable than more expensive alternatives

marginal cost

the cost of producing one more unit depends on the quantity that has already ben produced

marginal revenue

the change in total revenue generated by an additional unit of output