Microeconomics

Adds elements of psychology to traditional models in an attempt to understand decision making by the consumers

Factor of production - Physical = Stock of manufactured resources, human = Value of workforce

All things being equal

Economic system that focuses on society wide benefits. Based on design out waste, keep products/materials in use, regenerate natural systems

Simplified model of the economy that shows the f,ow of money through the economy

The additional benefit/utility received by consumers by paying a price that is lower than they are willing to pay

Spending by households on consumer goods and services over a period of time

The willingess and ability of consumers to purchase a quantity of a good or service

Shows the relationship between the price of a good/service and the quantity demanded

Goods/services considered to be harmful to people

A broad concept involving improvement in standards of living etc

The growth of the real value of output on an economy over time measured with GDP

A measure of responsiveness of something to a change in one of its determinants

Curve that shows the relationship between income and quantity demanded

A state of being equal without an outside disturbance

Shortage. Price of a good is lower than the equilibrium price such that the quantity demanded is greater than the quantity supplied

Surplus. Where the price of a good is higher than the equilibrium price, such that the quantity supplied is greater than the quantity demanded

Goods/services produced in one country and purchased by consumers in another country

External costs or benefits to a third party when a good or service is produced or consumed

Land, labour, capital, entrepreneurship

Rent

Wages

Interest

Profit

Means of production are privately held by individuals and firms. Supply/demand determine what,how much, how and for whom to produce.

Goods/services purchased by consumers in one country that have been produced in another country

A measure in the responsiveness of the demand for a good or a service to a change in incomeI

Added to the selling price of a good or a service

An increase in the general or average level of prices and a fall in the value of money

Percentage change of a price index over a certain time period

Investment, government expenditure and export revenues that add spending to the circuclar flow of income

The price of borrowing money

As the price of a good falls, the quantity demanded will normally increase

As the price of a good rises, the quantity supplied will normally rise

Savings, taxes and import expenditure that remove spending from the circular flow of income

The additional costs of producing more than one unit of input

Extra utility derived from consuming one or more unit of a good or a service

Where buyers and sellers come together to carry out an economic transaction

Horizontal sum of the individual demand curves for a product of all the consumers in a market

The point where the quantity of a product demanded is equal to the quantity of a product supplied. This creates the market clearing price and quantity where there is no excess demand or supply

A failure of markets to produce at the point where community surplus is maximised (consumer surplus + producer surplus)

Goods/services considered to be beneficial for people

Negative effects suffered by a third party when a good/service is consumed

Demand for it increases as income increasesN

Areas of economics that are open to personal opinion and belief

Next best alternative when an economic decision is made

Increase in price of a G/S leads to a fall in the QD of the G/S to zero

Where a change in the price of a G/S leads to a fall in the QS of the G/S to zero

Where a change in the price of a G/S leads to no change in the QD of the G/S

Where a change in the price of a G/S leads to nochange in the QS of the G/S

Deals with areas of the subject that are capable of proven to be correct or not

Benefits that are enjoyed by a third party when G/S are consumed

Benefits that are enjoyed by a third party when a G/S is prpdiced

Imposed by an authority and set below the equilibrium price, prices cannot rise above this set price

Imposed by authority, set above or below the market equilibrium price

Imposed by an authority and set above market price, proces cannot fall below this set price

Change in the price of a G/S leads to a proportionally larger change in the QD of it

Change in price of a G/S leads to a proportionally smaller change in the QD of the G/S

Change in the price of a G/S leads to a proportionally smaller change in the QD of the G/S

Change in the price of a G/S leads to a proportionally smaller change in hte QS of the G/S

Price elasticity of demand

Measure of the responsiveness of the QD of a G/S when there is a change in its price

Price elasticity of supply

Measure of responsiveness of the QS of a G/S when there is a change in its price

Additional benefit received by producers by receiving a price that is higher than the price they were willing to receive

Production possibilities curve

Willingness and ability to purchase a quantity of a G/S at a certain price over a given time period

Willingness and ability to produce a quantity of a good or service at a given price over a given time period