A
A good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls.
Refers to the effort and skills of people who work to produce goods and services.
Labor
Refer to the value of the next best alternative that you give up when making a choice
Opportunity Cost
A direct (positive) relationship between price and quantity supplied.
Law of Supply
A legal maximum price.
Price Ceiling
The combine factors of production, land, labor and capital to make profit. They identify opportunities, organize resources and bring new products or services to the market.
Entrepreneurship
It refers to the desire for a good or service backed by the ability and willingness to pay for it
Demand
The situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change.
Equilibrium
Happens when the quantity demanded exceeds the quantity supplied.
Shortage
Refer to goods that are often used together so that consumption of one good tends to enhance consumption of the other.
Complementary Goods
What laws that impose an upper limit on the interest rate that lenders can charge.
Usury Law
A marketplace where people, companies, and government trade financial assets like stocks, bonds, loans, and currencies.
Financial Market
Making this focuses on individual and business decisions. It examines how people and firms make decisions about what to produce, how to produce, and for whom to produce.
Microeconomics
The extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid.
Consumer Surplus
Relates to consumer behavior and satisfaction. It suggests that as consumers consume more units of a particular good or service within a given time frame, the additional satisfaction or utility derived from each additional unit decreases.
Diminishing Marginal Utility
It refers to the “price” of borrowing in the financial market; a rate of return on an investment.
Interest Rate
Refers to how sensitive or responsive one variable is to a change in another variable. Most commonly, it measures how much the quantity demanded or supplied of a good changes when there’s a change in price, income, or other factors.
Elasticity
Factors affecting the demand curve for goods and services.
Buyer
Income
Taste or Trend
Expectation
Related Goods
It is called _________ when % change in quantity > % change in price.
Elastic
What is the other term for all other things being equal.
Ceteris Paribus
What are the five factors affecting the shift of demand in labor market.
Education & Training, Technology, Number of companies, Government Regulations, Price and Availability of other inputs
What is the formula for Price elasticity of supply.
A bookstore increases the price of a novel from 100 to 120.
As a result, the quantity sold decreases from 1000 to 800 copies.
Calculate the PED and state whether the demand is elastic, inelastic, or unit elastic.
1.22 Elastic
A video streaming service lowers its monthly subscription price from 150 to 100.
As a result, the number of subscribers increases from 5,000 to 8,000.
Calculate the PED and interpret the result.
1.15 Elastic
A factory increases the price of a gadget from 5,000 to 6,000.
As a result, the quantity supplied rises from 1,000 units to 1,300 units.
➤ Calculate the PES.
1.44 Elastic