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Restaurant meals |
elastic |
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Foreign travel |
elastic |
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Automobiles |
elastic |
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Chevrolet automobiles |
elastic |
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Fresh tomatoes |
elastic |
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Salt |
inelastic |
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Matches |
inelastic |
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Toothpicks |
inelastic |
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Airline travel |
inelastic |
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Gasoline |
inelastic |
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meaning price changes have little effect on the quantity we buy |
inelastic |
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meaning price changes greatly affect our purchase of them |
elastic |
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ability and willingness to buy goods and services at alternative prices |
Demand |
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is the maximum quantity that buyers are willing and able to buy at a specific price |
Quantity demanded |
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demand given a time period |
Demand Schedule |
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graph of demand schedule |
Demand Curve |
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the quantity of a product demanded at a given period increases as its price decreases ceteris paribus (latin for all else being equal) |
law of demand |
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increase in purchasing power as price of a product decreases |
Income Effect |
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as price of a product Increases demand for substitutes product increases |
Substitution Effect |
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an interaction of buyers and sellers; meeting together of people to buy and sell |
Market |
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combination of all the demand of the consumers in the market |
Market Demand |
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high income capable of buying more products |
Income |
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demand for products increase for different occasions |
Occasion |
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change in tastes |
Preference |
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consumers increase |
Population |
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speculation on prices |
Expectation |
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prices of substitute and complementary products |
Price of related products |
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movement along demand curve due to change in price (ceteris paribus) |
Change in quantity demanded |
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shift in demand curve due to changes in other factors |
Change in demand |
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the willingness and ability to sell at alternative prices |
Supply |
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a table showing the supply for a given time or period |
Supply Schedule |
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graph of the supply schedule |
Supply curve |
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quantity of a good supplied in a given time increases as its price increases (ceteris paribus) |
Law of Supply |
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land labor capital enterprise |
Cost of production |
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shows the maximum possible output which can be produced for a given level of inputs |
Production function |
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As one more unit of a variable resource is added to a fixed resource at some point the additional output from the last unit of the variable resource will be lower |
Law of Diminishing Returns |
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a period of time certain production conditions hold constant or fixed |
Short run |
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a period of time certain production conditions are variable or can be changed |
Long run |
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means that only the price has changed and a new quantity is supplied along a constant supply curve |
CHANGE IN QUANTITY SUPPLIED |
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means that the position of the supply curve has changed due to a change in other factors of supply |
CHANGE IN SUPPLY - or a SHIFT in supply |
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zfinancial charg imposed on an individual or an entity by the government |
tax |
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type of financial government assistance such as a grant or tax break |
subsidy |
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shows the points where there is an agreement between the seller and the buyer in the market |
PRICES |
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is a price set by the interaction of supply and demand |
Market price |
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price at which the quantity demanded by consumers and the quantity supplied by producers are the same |
Equilibrium price |
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output level that corresponds to the equilibrium price |
Equilibrium quantity |
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an amount or a quantity in excess of what is needed or demanded |
Surplus |
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an amount or extent of deficiency due to excess demand |
Shortage |
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the maximum selling price it is a government-imposed limit on how high a price can be charged on a product |
Ceiling Price |
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a price support it is a government-imposed limit on how low a price can be charged on a product |
Floor Price |
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Interferes in the market to help the consumers and producers |
GOVERNMENT |
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A system of statistics and accounts that keep tracks of production refers to the act of purchasing goods and services in the market |
Consumption |
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expenses incurred by the government for providing services which are essential to the functioning of society |
Government Expenditure |
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a venue for trading factor inputs for production |
Input market |
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a venue for trading final goods and services |
Output market |
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income that is not used for current consumption |
Savings |
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economic activity that forgoes present consumption with the goal of increasing consumption in the future |
Investment |
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the total market value of all final goods and services produced within a country's national borders in a year |
Gross Domestic Product (GDP) |
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the total market value of all final goods and services that the country's citizens produced regardless of their location |
Gross National Product (GNP) |
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based on prevailing price in the market |
NOMINAL GNP |
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based on the price in a given base year (as determined by NEDA) |
REAL GNP |
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WHAT ARE THE 3 APPROCHES TO GDP MEASUREMENT |
FACTOR INCOME APPROACH/FINAL EXPENDITURE APPROACH/INDUSTRIAL ORIGIN APPROACH |
