Elasticity test
Terms
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- Economic law that states that consumers buy more of a good when its price decreases and less of a good when price increases
- Law of Demand
- The total amount of money a firm recieves by selling goods or services
- total revenue
- a measure of how consumers react to a price change
- elasticity of demand
- a government payment that supports a business or market
- subsidy
- The amount a supplier is willing and able to supply at a certain price
- quantity supplied
- A measure of the way quantity supplied reacts to change in price
- elasticity of supply
- The cost of operating a facility such as a store or factory
- operating cost
- A maximum preice that can be legally charged for a good or service
- price ceiling
- The point at which quantity quantity demanded and quantity supplied are the same
- equilibrium
- Describes any price or quantity not at equilibrium; when quantity supplied is not equal to quantity demanded in a market
- disequilibrium
- a situation in which a good or service is unavailable or a situation in which the quantity demanded is greater than the quantity supplied
- shortage
- a system of allocaring scarce goods and services usaing criteria other than price
- rationing
- a minimum price that an employer can pay its employee for an hour of labor
- minimum wage
- a price ceiling on rent
- rent control
- a market structure that does not meet the conditions of perfect competitions
- imperfect competition
- a market that runs most efficiently when one large firm supplies all of the output
- natural monopolies
- monopoly created by the government
- government monopoly
- division of customers into groups based on how much they will pay for a good
- price discrimination
- a way to attract customers through style, service, or location, but not a lower price
- nonprice competition
- a formal organization of producers that agree to coordinate prices and production
- cartel
- a product that is the same no matter who produces it
- commodity
- the expenses a firm must pay before it can begin to produce and sell goods
- start-up costs
- goods used in place of eachother
- substitute
- a good that consumers demand more of when their incomes increase
- normal good
- two goods that are bought and sold together
- complement
- the change in output from hiring one additional unit of labor
- marginal product of labor
- a chart that lists how much of a good a supplier will offer at different prices
- supply schedule
- the additional income from selling one more unit of a good;sometimes equal to price
- marginal cost
- the additional income from selling one more unit of good;sometimes equal to price
- marginal revenue
- a level of production in which the marginal product of labor increases as the number of workers increases
- increasing marginal revenue
- a government intervention in a merket that affects the production of a good
- regulation
- a factor that can change
- variable
- a graph of all of the quantity supplied of a good by all suppliers will offer at different prices
- market supply curve
- a sudden shortage of a good
- supply shock
- costs of production that affect people who have no control over how much of a good is produced
- spillover costs