Econ vocab

revenue

total amount of income generate by the sale of goods or services related to a company’s primary operations

price

amount of money required to purchase a product or service (amount a customer is willing to pay)

cost

total amount of money used by organization to produce and sell it to consumers

fixed cost

expenses that do not change and remain the same price and frequency

variable cost

expenses that change based on how much a company produces and sells

profit

total revenue a business earns minus the total costs

quantity demanded

he number of a good or service that consumers are willing to buy at a specific price

stock market

involves buying and selling shares of publicly traded companies

share (of a stock)

a unit of equity ownership in the capital stock of a corporation

new York stock exchange

an American stock exchange headquartered at the NYSE building in financial district of lower manhattan; largest stock exchange in the world by market capitalization

stock market sector

an industry group made up of companies that are engaged in similar or related businesses (11 sectors)

industrial sector

segment of the economy made up of businesses that aid other businesses in manufacturing, shipping or producing their products

consumer staple sector

essential products that are used by household in a daily basis; remain in demand regardless of economic conditions

consumer discretionary sector

companies that sell goods and services people want, but dont necessarily need

information technology sector

companies that develop, manufacture, and provide technology related hardware, software, and infrastructure, including computing, data processing, semiconductors, and telecommunication (provides things like cell phones and network)

materials sector

consists of businesses involved in discovering, extracting, and processing raw materials such as mining, metals, chemicals, and forestry products which are then supplies to other industries for manufacturing and construction

energy sector

companies and activities involved in the exploration, extraction, production, refining, and distribution of energy resources like oil, gas, coal, and renewables

financials sector

companies institutions, markets, and products that manage the flow of money, credit, and investments throughout an economy, including banks, insurance companies, investment firms, and stock exchanges

utilities stock

comprises companies and establishments that provide essential public services, such as electricity, natural gas, steam, water, and sewage removal

real estate sector

encompasses all activities related to the development, ownership, purchase, sale, and use of residential, commercial, and industrial property

healthcare sector

collection of industries and services dedicated to maintaining and improving human health, encompassing products like pharmaceuticals and medical devices, and services like hospitals, clinics, and health insurance

communication services sector

companies that provide telecommunication services (wireline and wireless), media, entertainment, and interactive digital media, including search engines, social media, and other platforms

stock market index

a brenchmark that measures the collective performance of a diversified group of companies within a specific stock market or sector, providing a snapshot of market health and trends

indices

statistical tools used to measure and track changes in economic variables over time, such as prices, production, or employment

dow Jones industrial average

a stock market index composed on 40 prominent blue chirp u.s. companies servicing as an indicator of the economy’s health and a snapshot of American capitalism

s&p 500

index of about 500 of the largest publicly traded companies in the u.s. representing a broad view of the overall stock market

nasdaq

a u.s. based stock exchange and a popular stock market index that tracks a broad range of companies, especially those in technology

market cap

total market value of a company’s outstanding shares, calculated by multiplying the current share price by the total number of shares issues

need

a good or service essential for a person’s survival and basic functioning

want

a desire for something that is not essential for survival but enhances quality of life

good

product that satisfies human wants or needs but is limited in supply, making it scarce and thus having an opportunity cost and exchange value

service

actions, processes, or activities performed for another person or entity, often in an intangible way, to provide value or meet a need/want

consumer

an individual or household that purchases goods and services for personal use, rather than for resale or use in production

producer

an individual, form, or country that creates or provides goods and services for sale in the market

scarcity

the fundamental problem of having unlimited human wants and needs versus limited resources to satisfy them

factors of production

the inputs or resources used to create goods and services: land, labor, capital, and entrepreneurship

land

the natural resources and physical space on which goods and services are produced

labor

representing the human effort, both physical and mental, used to create goods and services

capital

the resource used in production and investment, encompassing financial resources, physical assets, and human skills

human capital

the collection of skills, knowledge, experience, creativity, and personal qualities that individuals posses, which enhance their productivity and economic potential

physical capital

tangible assets such as buildings, machinery tools, and equipment that a business or economy uses to produce goods and services

entrepreneurship

the act out creating, organizing, and managing a new business venture by taking on financial risks to generate profit

market economy

an economic system where decisions about the production, distribution and pricing of goods and services are determined by the forces of supply and demand in a free market, rather than by government control

private ownership (of property)

the right of individuals or private entities to control, manage, and profit, from property, assets, and the means of production

freedom of choice

the fundamental right of individuals and businesses to make their own decisions in the economy w/o undue external coercion or interference, such as from the government or other parties

self-interest

the principle that individuals make decisions to maximize their own personal benefit, advantage, or well being

competition

the process by which various sellers each try to offer better products, lower prices, and other advantages to choosing their wares over a rival’s

system of market and prices

a market economy where the production and distribution of goods and services are determined by the interaction of supply and demand in various markets, using prices as a signaling mechanism to coordinate economic decisions

limited government involvement

a principle advocating for minimal government intervention in the economy, emphasizing free markets, individual liberty, and personal responsibility; where supply and demand dictate economic outcomes

The invisible hand

The self regulating nature of a free market where individual pursuit of a self interest unintentionally benefits society as a whole

mixed economy

economic system that blends characteristics of both market and planned economics, allowing for both private ownership and government regulations

traditional economy

economic system where decisions about what, how, and for whom to produce are based on customs, beliefs, and long-standing tradiitions

command economy

government controls and makes all decisions regarding production, investment, prices, and incomes within a country

demand

the desire to own something and the ability to pay for it

law of demand

says when a goods price is lower, the quantity demanded is greater

substitution effect

when consumer reacts to rise in the price of one good by consuming less of that good and more of a substitute good

income effect

the change in a consumer’s quantity demanded of a good that results from a change in their purchasing power, caused by a price change

demand schedule

a table that lists the quantity of a good that a person will purchase at various prices in a market

demand curve

a graphic representation of a demand schedule

ceteris paribus

as assumption that allows economists to isolate and analyze the effect of one specific variable on another by holding all other influencing factors constant

non price determinant of demand

factors that can cause demand for a good to change, including income, consumer expectations, population, demographics, and consumer tastes and advertising

changes in income

provides consumers with more or less money to spend - affects demand for most goods

changes in consumer expectations

expectations about future prices, income, or market stability can affect demand for certain goods

changes in demographics

statistical characteristics such as age, race, gender, occupation or income level which influence the packaging, pricing, and advertising for a product

changes in population size

affect the demand for most products such as houses or food

consumer tastes and advertising

result of advertising campaigns, social trends, the influence of television shows

price of related goods

demand curve for one good can also shift in respond to a change in the demand for another good

demand shift

change in quantity demanded, caused by factors other than the good’s own price

supply

the amount of a good or source that is available

law of supply

producers offer more of a good or service as its price increases and less as its price falls

quantity supplied

how much of a good or service a producer is willing and able to sell at specific price

supply schedule

shows how much of a good or service a supplier will offer at various prices

marginal product of labor

change in output from having one more worker

diminishing marginal returns

adding more of a single variable input to a production process will produce less and less output

subsidy

a government payment that supplys a business or market

excise tax

tax on the production or sale of a good