Econ 4 And 5 Flashcards
Any place where buyers and sellers meet to exchange goods and services
Markets
Combo of quantities that some one would be willing and able to buy over a range of possible prices at a given moment
Demand
Rule stating that more will be demanded a lower prices and less at higher prices
Law of demand
5 factors that influence that demand of goods
1 tastes and preferences of the consumer= fashions and clothes
2 income of people
3 change in prices of related products (tea vs coffee)
4 advertisement expenditures (ads greatly influence consumer)
5 the number of consumers in the market ( the greater the number the higher demand)
The amount of product a producer or seller would be willing to offer for sale at all possible prices in a market at a given point in time
Supply
The principle that more will be offered for sale at higher prices than at lower prices
Law of supply
5 factors that influence the supply of goods
1 price (if price of product increases supply increases and vice versa) 2 cost of production 3 natural conditions 4 technology 5 government policies
The ability to change/adapt
Elasticity
The responsiveness of quantity supplied to a change in price
Elasticity Of supply
Two major types of supply elasticity
1 elastic supply- a slight change in price will lead to a drastic change in demand and quantity
2 inelastic supply- is when a change in the price have little t no effect on demand and quantity
Something that motives
Incentives
A government payment to encourage or protect a certain economic activity
Subsidy
Costs of production that do not change when output changes
Fixed cost
Production cost that vary as output changes
Variable cost
A broad category of fixed costs that includes interest rent taxes and executive salaries
Overhead
The sum of variable cost plus fixed cost all cost
Total cost
The extra cost of producing one additional unit of production
Marginal cost
Average price that every unit of output sells for
Average revenue
The total amount earned by company from the sales of its products
Total revenue
Extra revenue from the sale of one additional unit of output
Marginal revenue
Production level where the total cost equals total revenue
Break even point
