Chapter 15 Market Economics Vocab

Question 1

Supply:

Answer 1

The quantity of a product or service available for sale, lease, or trade at any given time.

Question 2

Demand:

Answer 2

A quantity of a product or service that is desired for purchase, lease, or trade at any given time.

Question 3

Price:

Answer 3

An interaction of supply and demand that determines a price a buyer and seller agree is the value of a good or service to be exchanged. A quantification of value in a transaction.

Question 4

Value:

Answer 4

In general, the worth of an item as determined by its utility, desirability, scarcity, affordability, and other components and quantified as price.

Question 5

Cost:

Answer 5

Those expenses necessary to generate and deliver the item to the market. The essential production costs are the costs of capital, materials, and supplies; labor; management; and overhead.

Question 6

Market:

Answer 6

1. Buyers and sellers exchanging goods and services through the price mechanism.
2. The totality of interactions between supply and demand for a specific set of products or services in a particular geographic area.

Question 7

Market Equilibrium:

Answer 7

A theoretical market state in which the forces of supply and demand are in balance.

Question 8

Base Employment:

Answer 8

The number of persons employed in the businesses that represent the economic foundation of the area. For example, the auto industry has traditionally been the primary base employer of the Detroit metropolitan area.

Question 9

Total Employment:

Answer 9

Total employment in a market includes base, secondary, and support industries. Total employment creates a demand for a labor force.

Question 10

Vacancy:

Answer 10

A measure of the unoccupied supply of exiting space in a building or market at any point in time. A vacancy rate is the amount of vacant space divided by the total amount of existing space.

Question 11

Absorption:

Answer 11

The consumption of available vacant property in a building or market.