Chapter 4&5 Test Vocab Flashcards
(22 cards)
Anyplace where buyers and sellers meet to exchange goods and services
Markets
Combo of quantities that someone would be willing and able to buy over a range of possible prices at a given moment (a consumers willingness and ability to consume any goods)
Demand
Holding that all other factors constant an increase in the price of a good or service will….
Decrease the quantity demand and vica versa
Rule stating that more will be demanded at lower prices and less at higher prices
Law of Demand
The amount of a product a producer or seller would be willing to offer for sale at tall possible prices in a market at a given point in time
Supply
The principal that more will be offered for sale at higher prices than at lower prices
Law of Supply
The ability to change/adapt
Elasticity
The responsiveness of quantity supplied to a change in price
Elasticity of supply
The price of a good or service is determined by its….
Supply and demand
The market reaches an equilibrium price where ____ equals ____.
Supply equals demand
Something that motivates
Incentive
A government payment to encourage or protect a certain economic activity
Subsidy
Cost of production that do not change when output changes
Fixed costs
Production costs that vary as output changes
Variable costs
Variable costs is sometimes called…
Overhead
A broad category of variable costs that includes interests, rent, taxes, and executive salaries
Overhead
The sum of variable costs and fixed costs (all costs)
Total Cost
Extra costs of producing one additional unit of production (additional equipment)
Marginal costs
Average price that every unit of output sells for
Average revenue
Total amount earned by a company from the sales of its product
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
