Unit 2 Econ Vocab

surplus

situation where quantity supplied is greater than the quantity demanded at a given price

demand schedule

listing showing the quantity demanded at all possible prices that might prevail in the market at a given time

marginal utility

satisfaction or usefulness obtained from acquiring one more unit of a product

law of demand

rule stating that there will be more demanded at lower prices and less at higher prices; inverse relationship between price and quantity demanded

change in demand

consumers demand different amounts at every price, causing the demand curve to shift to the left or right

income effect

the portion of a change in quantity demanded caused by a change in a consumer’s real income when the price of a product changes

perfect competition

market structure characterized by a large number of well informed independent buyers and sellers who exchange identical products

market equilibrium

condition of price stability where the quantity demanded equals the quantity supplied

fixed cost

cost of production that does not change when output changes

diminishing marginal utility

decreasing satisfaction or usefulness as additional units of a product are acquired

change in quantity supplied

change in amount offered for sale in response to a price change; movement along the supply curve

supply schedule

tabular listing showing the quantities produced or offered for sale at every possible price in the market

elastic

type of elasticity where the percentage change in the independent variable (price) causes a more than proportional change in the dependent variable (quantity demanded or supplied)

change in supply

different amounts offered for sale at every possible price in the market, shift of the supply curve

complements

products that increase the value of other products; products related in such a way that an increase in the price of one reduces the demand of both

monopoly

market structure characterized by a single producer; imperfect competition

price floors

lowest legal price that can be charged for a product

variable cost

production cost that varies as output changes; labor, energy, raw materials, etc

imperfect competition

market structure where all conditions of pure competition are not met, monopoly

monopolistic competition

market structure having all conditions of pure competition, except for indentical products

demand cure

graph showing the quantity demanded at every possible price that might prevail in the market at a given time

law of supply

rule stating that more will be offered for sale at high prices than at lower prices

substitues

competing products that can be used in place of one another

inelastic

type of elasticity where the percentage change in the independent variable causes a less than proportionate change in the dependent variable

microeconomics

branch of economic theory that deals with behavior and decision making by small units such as individuals and firms

oligopoly

market structure in which a few large sellers dominate and have the ability to affect prices in the industry

price celings

maximum legal price that can be charged for a product

shortage

situation where the quantity supplied is less than quantity demanded at a given price

marginal cost

extra cost of producing one additional unit of production

change in quantity demanded

movement along the demand curve showing that a different quantity is purchased in response to a change in price