Studied by 2 people
Economic growth
increase in the level of output by a nation
Demand
how much consumers are willing and able to buy at various given prices over a period of time.
Quantity demanded
how much consumers are willing and able to buy at a given price
Disposable income
income that is available to someone over a period of time to spend.
Inferior goods
goods for which demand will fall if income rises
Normal goods
goods for which demand will increase if income rises
Supply
how much producers are willing and able to sell at various given prices over a period of time
Quantity supplied
how much producers are willing and able to sell at a given price
Indirect taxes
taxes levied on spending
Excess demand
shortage of goods in the market
Excess supply
goods remain unsold
Price elasticity of Demand
responsiveness of demand to a change in a goods own price.
Price elasticity of Supply
responsiveness of supply to a change in a good’s own price
Income elasticity of Demand
responsiveness of demand to a change in income
Luxury goods
goods that consumers like to buy if they can afford them
Economy
system that attempts to solve the basic economic problem
Mixed Economy
economy that relies on both the public sector and the private sector to provide goods and services
Market Failure
when markets lead to inefficiency
Privatization
act of selling a government owned organization or activity to private investors
Externalities
spillover effects on people outside the market system
Productivity
rate at which goods and services are produced in relation to work, time, and money needed to produce them
Division of labor
breaking down the production process into smaller parts, with each worker allocated to a specific task.
Specialization
production of a limited range of goods.
Fixed costs
costs that do not vary with the level of output
Variable costs
costs that change when output changes.
Economies of scale
falling average costs due to expansion
Take over
when one firm buys out another firm
Monopoly
when one firm dominates a market
Barriers to entry
legal barriers, patents, marketing budgets, technologies, and high start-up costs
Wage rate
amount of money paid to workers for their services over a period
Anti-competitive practices
attempts by firms to prevent or restrict competition
Note 
Flashcard (32)