The price at which quantity demanded and quantity supplied are equal. (or use labelled supply and demand diagram)
When a market results in a misallocation of resources
(or labelled marginal cost and benefit diagram)
The whole cost resulting from any decision or choice, for example by a firm or a consumer
A good for which demand increases as income increases
A good with a positive income elasticity of demand
Income elasticity of demand:
Income elasticity of demand= % Change in Quantity demanded
% Change in income
A payment that reduces the cost or price of a good or service often from the government
Economies of scale:
Falling average costs as the size or output of a firm increases.
Benefits received by a third party; beneficial spin-off effects; social benefit greater than private benefit.
A good for which the long term private costs of production exceed the short-term private costs of consumption.
An adverse consequence of a economic activity that is experienced by third parties; an adverse spin-off effect resulting from an economic activate; when the social costs of activity exceeds private costs of activity.
Total planned expenditure in the economy.
This is achieved when you cannot make someone better off without making someone else worse off; connote produce more of one thing without producing less of another (like at equilibrium)
Where government spending exceeds government recipes in a financial year
Where government recipes exceeds government spending in a financial year
an intervention system that aims to limits the fluctuations of the prices of a commodity
A good that is traded. Often unbranded and raw materials such as tea, oil and wheat
A market situation where there are a lot of buyers and sellers
Two products which can be consumed together
A good that is demanded for more than purpose so that when there is and increase in demand for one product there is a reduction in supply for another e.g milk used to make butter and cheese
The amount that consumers are willing and are able to buy a product at each different price level
A good that is over-consumed and brings less overall benefit to the consumer; negative effects. such as alcohol and tobacco
When the demand for one good comes from the demand of another; the demand for cars stimulates the demand for steel. so steel had derived demand.
Diseconomies of scale:
When an increase in the scale of production leads to an increase in the total average cost of firms
The welfare of the economy; the benefits or satisfactions a person or society gets from the allocation of resources. Can be measured by looking at standard or living or peoples well being
When supply at a particular price is greatre then demand
When demand at a particular price is greater than supply
when the cost or benefits of a market transaction spill over to third parties
Goods which have no opportunity cost; air
Free market economy:
One that has very little government involvement in providing goods and services. It tries to ensure that the rules of the market are fair; e.g people cannot steel others property
When other people benefit from others purchasing a product or good. Particularly in the case of public goods
Goods and services:
A good is considered to be tangible like a CD of a phone. A...
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