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An applied social science dealing with how humankind uses technical knowledge and scarce productive resources to produce food and fiber and to distribute them to society for consumption over time
Ag Economics
A condition in which opposing forces within a system just offset one another
equilibrium
as successive amounts of a variable input are combined with a fixed input, the total product will increase, reach a maximum and eventually decline
Law of diminishing returns
Inputs with which goods and services are produced
Resources
Shows all combinations of products that can be produced with a given set of resources
Production possibilities curve
A cost for which there is no cash outlay at the time a resource is being used, or for which no cash payment is required
Implicit costs
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The area of economics that deals with individual decision units - people, firms or markets - within the economy
Microeconomics
The use of government policy to achieve specific economic goals by manipulating expenditures or the tax rate
Fiscal policy
The percentage change in quantity demanded due to a 1 percent change in price, ceteris paribus
Price elasticity
The process of controlling or directing a situation, also one of the four factors of production, with responsibility for decision making
Management
The amount by which a firm's revenue exceeds its total costs. Also referred to as pure profit
Economic profit
a condition in which the economic outcome cannot be improved upon
Optimum
allocating resources (or consumption expenditures) in different possible uses so as to maximize net economic benefits
economic efficiency
The area of economics that deals with output, employment, incomes or other activities in the aggregate
Macroeconomics
The total market value of all finished goods and service produced within the domestic economy, whether by foreign or American resources in a given period
Gross domestic product
The responsiveness of quantity purchased to a 1 percent change in income, ceteris paribus
income elasticity
as an individual consumes additional units of a specific good, holding everything else constant, the amount of satisfaction from each additional unit of that good decreases
Law of diminishing utility
A time period where one or more of the factors of production are fixed
Short run
Supply curve
A buyer and seller without market power in a purely competitive market
Price taker
The value of other opportunities that are given up in order to produce or consume any good
Opportunity Costs
Manipulation of the money supply and the interest rate to achieve specific economic goals
Monetary policy
The responsiveness of the quantity demanded of one commodity to a 1 percent change in the price of another commodity, ceteris paribus
Cross price elasticity
A combination of two or more resources in such a way that the resource cost of producing a given level of output is minimum
Least cost combinations
a time period long enough that all factors of production can be varied
Long run
a market organization of many firms in an industry, a homogeneous product, and the freedom of firms to enter or leave the industry. No firm in this type of industry can influence the market price of its product
Pure competition
A buyer or seller in an imperfectly competitive market structure who has market power and can determine the price or quantity sold
Price searcher/setter
A basic economic condition in which our wants exceed the resources available to satisfy those wants
Scarcity
shows the quanities of goods that a consumer will buy at different prices for that good, everything else unchanged
Demand curve
The input-output relationship between resources and their product
Production function
Resources whose marginal rate of substitutioln changes as their proportions are changed, ceteris paribus
Imperfect substitutes
an expenditure made for the use of a resource
Explicit costs
Single seller in the industry
A firm in an oligopolistic market (a market characterized by a small number of firms producing for that market)
Oligopoly