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price
the amount of money expected, required, or given in payment for something.
rationing
the controlled distribution of a limited supply of a good or service.
biofules
fuels that are derived from biological materials, such as plants and animal waste, used as an alternative to fossil fuels.
economic model
a simplified representation of reality that allows economists to focus on the
effects of one change at a time.
equilibrium price
a price at which the quantity of a product demanded by the consumer equals the quantity supplied by producers.
equalibrium quantity
the quantity of a good or service demanded by consumers and supplied by producers when the market is in equilibrium.
surplus
the amount of a good or service that is available for sale after all demand has been satisfied, often resulting in excess supply.
shortage
A lack of something that is desired.
price ceiling
a maximum price set by the government to prevent prices from going to high.
price floor
a minimum price set by the government to prevent prices from going too low.
target price
a price set for a good or service that producers aim to achieve in the market, often used as a benchmark for pricing strategies.
nonrecourse loan
a type of loan secured by collateral, typically property, where the borrower is not personally liable for repayment beyond the collateral; if the borrower defaults, the lender can only seize the collateral and cannot pursue the borrower's other assets.
quantity demanded
the amount of a good or service that consumers are willing and able to buy at a specific price.
demand
the quantity of a good or serice that consumers are willing and able to buy at various prices.
demand schedule
a list of the quantities of a good that one person is will buy at varius prices
demand curve
a graph of the relationship between the price of a good or service and the quantity buyers are willing and able to buy.
market demand
a sum of all the individual quantities demanded in a market
law of demand
an economic law stating that as the price of a good or service increases, the quantity demanded decreases, and vice versa.
substitue good
a product that can be used in place of another; for example, butter and margarine are substitute goods.
change in quantity demanded
an increase or decrease in quantity demanded (the amount of a
good or service that consumers are willing and able to buy at a specific price) as a result of a change in price.
chanage in demand
an increase or decrease in demand (the quantity of a good or service that
consumers are willing and able to buy) as a result of a change in factors other than price; a shift of the demand curve to the left or right.
demand shifters
factor other than price that can cause a change in demand for a good or
service; examples include changes in consumer incomes or tastes.
complementary good
a product that is used or consumed jointly with another product; tennis
rackets and tennis balls are one example.
quantuty supplied
the amount of a good or service that producers are willing and able to offer
for sale at a specific price.
supply
he quantity of a good or service that producers are willing and able to offer for sale at various prices.
supply schedule
a table that shows the quantities supplied at different prices in a market.
supply curve
a graph that shows the relationship between price and the quantity that producers are willing and able to supply.
market supply
the sum of all the individual quantities supplied in a market.
law of supply
an economic law stating that as the price of a good or service increases, the quantity supplied increases, and vice versa
revenue
the amount of money a firm receives in the course of doing business.
change in quantity supplied
an increase or decrease in quantity supplied (the amount of a
good or service that producers are willing and able to offer for sale at a specific price) as a result of a change in price.
change in supply
an increase or decrease in supply (the quantity of a good or service that
producers are willing and able to offer for sale) as a result of a change in factors other than price; a shift of the supply curve to the left or right.
supply shifter
a factor other than price that can cause a change in the supply of a good or
service; examples include changes in technology and government policy.
subsidy
a government payment to a supplier of goods or services, designed to help that supplier continue to operate.
excise tax
a tax on the manufacture or sale of a good.
elasticity
a measure of the degree to which the quantity demanded or supplied of a good or service changes in response to a change in price.
elasticity of demand
a measure of the sensitivity of consumers to a change in price.
elastic
responsive to a change in price, applied to either supply or demand; the supply or demand of a good or service is said to be elastic when the quantity supplied or demanded changes significantly with a change in price.
unitary elastic demand
a condition that exists when the percentage change in the quantity
demanded of a good or service equals the percentage change in price; a demand elasticity equal to exactly 1.
total revenue test
a tool used by producers to gauge the impact of a change in price on
revenues earned; it is also used by economists to determine the elasticity of demand for a good or service.
revenue table
a table that lists the various prices for a given product along with the quantity expected to sell and the revenue that would be earned by the producer at each price.
total revenue
he total amount received by a business for selling a good or service; it is
calculated by multiplying the quantity of a good or service sold by its price.
elasticity of supply
a measure of the sensitivity of producers to a change in price.
unitary elastic supply
a condition that exists when the percentage change in the quantity
supplied of a good or service equals the percentage change in price; a supply elasticity equal exactly to 1.
supply chain
the network of people, organizations, and activities involved in supplying goods and services to consumers.
inelastic
not responsive, or only slightly responsive, to a change in price, applied to either supply or demand; the supply or demand of a good or service is said to be inelastic when the quantity supplied or demanded does not change significantly with a change in price.
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