what is economics?
Service
Work that is performed for someone
Traditional Economy
Economic system in which basic economic activity stems from ritual, habit, or custom
Deprecation
A noncash charge a firm takes for the general wear and tear on its capital goods
Demand
The desire, ability, and willingness to buy a product
Supply
The amount of a product that could be bought at all possible prices that could prevail in the market
Opportunity Cost
The cost of the next-best alternative when a choice is made
Fixed Income
Does not increase even though prices go up
Merger
A combination of two or more businesses to form a single firm
Elastic
Describes demand when a given change in price causes a relatively larger change in the quantity demanded
Diminishing Returns
Stage where output increases at a decreasing rate as more units of a variable are added
Human Capital
The sum of the skills, abilities, health, knowledge, and motivation of people
Socialism
Political and economic system in which the factors of production are owned and controlled collectively by the state
Vertical Merger
Business combination of firms involved in different steps of manufacturing or marketing
Inelastic
Describes demand when a given change in price causes a relatively smaller change in the quantity demanded
Break-Even Point
Meeting costs with production/ sales
Production Possibilities Frontier
Diagram representing various combinations of goods and services an economy can produce when all resources are fully employed
Social Security
A federal program of disability and retirement benefits
Nonprofit Organization
A “businesslike organization” which seeks to develop financially and earn profit, not for business owners and stockholders, but for a collective interest or value system
Demand Curve
Graph showing the quantity demanded at each and every price at a given time
E-commerce
Electronic business or exchange conducted over the Internet
Gross Domestic Product
Dollar value of all final goods, services, and structures produced within a country’s borders in a 12-month period
Economic Equity
Illegal to discriminate, minimum wage, Ethical and honest advertising, Schooling
Conglomerates
A firm with at least four unrelated businesses, Diversification
Diminishing Marginal Utility
The decrease in satisfaction or usefulness received from each additional unit of a product
Subsidy
A government payment to an individual, business, or other group to encourage or protect a certain type of economic activity