Economics Vocabularies Flashcards
Review this before each test
Firms
An organization or a cooperation that provides professional goods or services for profit
Household
One or more people who live under the same housing units.
Enterprise
A person, who sets up a business because of opportunity
Capital
Machineries, technology for production. (tools to enhance production).
Market equilibrium
A state in which the market between supply and demand is balanced.
Market disequilibrium
A state in which the market between supply and demand is unbalanced
Compliments
Products that need to work together in order to be used
Substitutes
Product or services that are similar to each other that can be replaced with one another
Shortage
Where demand is too high for supply to keep up
Excess supply/Surplus
When market price is above equilibrium price, resulting in extra supply because of the market price being above equilibrium.
Subsides
Works the opposite way of taxes. Where benefits are given to individuals, businesses/firms (aid for businesses, individuals, etc), which are usually by the government via cash payments or reduction of taxes.
Opportunity cost
Lost of money or benefit when selecting a choice
Resource allocation
How firms decide which goods or services to distribute their resources to.
Demand elasticity
Demand for product that is sensitive to changes in price, often because of available substitutes
Inelastic demand
Demand for product that is unresponsive to changes in demand
