microeconomics definitions

occurs when there is a large numbers of buyers and sellers acting independently; an individual seller has very little market power to influence the price of a product

the quantity of a good or service consumers are willing and able to purchase at various prices during a specific time period, ceteris paribus

as the price of a product decreases, the quantity demanded of it will increase

all factors affecting demand other than price, which cause the entire demand curve to shift

goods whose demand increases as people's incomes increase e.g. Nike shoes

goods who's demand decreases as people's incomes increase e.g. Tesco everyday value range

goods that have similar characteristics and uses to consumers

goods that are consumed together

the quantity of a good or service producers are willing and able to offer at various prices during a specific time period, ceteris paribus

as the price of a product increases, the quantity supplied will usually increase

all factors affecting supply other than price, which cause the entire supply curve to shift

when two or more goods are derived from the same product so that it is impossible to produce more of one without producing more of the other

secondary product made during the production of something else

when the production of two goods uses similar resources and processes so if a supplier produces more of one good, it mens producing less of the other

tax imposed on a good or service, typically paid to the government by the producer and therefore considered a cost of production

money granted by the government to a firm or industry, reducing the firm's costs of production and increasing the supply of a good/service

when governments monitor firms and industries to ensure they are abiding by relevant legislation

the point where the supply curve of a good or service crosses the demand curve, at the price where the quantity demanded equals the quantity supplied

a state where quantity demanded does not exactly equal quantity supplied, due to changes in the non-price determinants of demand and supply

when the quantity demanded of a good is less than the quantity supplied; occurs when the price in the market is above the equilibrium price

when the quantity demanded of a good is more than the quantity supplied; occurs when the price in the market is below the equilibrium price

the way in which price changes affect quantity demanded and quantity supplied, thus determining resource allocation in a market

the function of the price mechanism where information is provided to consumers and producers about what should be consumed and produced

the function of the price mechanism where motivation is provided to consumers and producers to reallocate resources in a market

the function of the price mechanism where the economic question of 'for whom' is determined

refers to improved resource use, where a firm can produce the same good but with fewer resources

the sum of the consumer surplus and producer surplus; the total benefit gained by society when the market is at equilibrium

the difference between the price that consumers pay and the price they are willing to pay

a measure of how much quantity demanded of a good or service changes in response to a price change of the same good or service

a good or service whose quantity demanded does not change much in response to a price change because consumers consider it to be essential

the money earned by a firm for selling a good or service; the selling price multiplied by the total quantity sold

primary goods that are important inputs to production, such as oil, iron ore and timber

the money remaining from sales revenue after subtracting the costs of production

the burden of tax paid by consumers or producers

a measure of how much quantity demanded of a good or service changes in response to an income change

a measure of how much the quantity supplied of a good changes when there is a change in its own price

goods that have negative effects when consumed and cause negative externalities of consumption

occurs when markets are no longer allocatively efficient, and marginal social benefit does not equal marginal social cost

a market where buying and selling transactions re unrecorded, and usually illegal

goods and services that are simultaneously rivalrous and excludable

goods that are both non-rivalrous and non-excludable

the condition that occurs when someone consuming a good or service prevents someone else from consuming the good or service

the condition that occurs when someone can be prevented from consuming a good or service

goods or services that are excludable and non-rivalrous

when a non-excludable good will not be produced by the free market because no-one is willing to pay for it when they think someone else will pay for it

goods or services that are rivalrous but non-excludable

goods that are beneficial to the individual and society as a whole, and are usually under-provided in a free market

a firm's ability to produce with lower average costs when they grow in size

an assumption in economics that all firms are motivated solely by profit and that they aim to make as much profit as possible.

when the production of a good or service generates a negative effect on a third party or society, which has not been factored into the costs of producing the good

when the production of a good or service generates a positive effect on a third party or society, which has not be factored into the costs of producing the good

when the consumption of a good or service generates a negative effect on a third party which has not been factored into the decision to consume that good

when the consumption of a good or service generates a negative effect on a third party which has not been factored into the decision to consume that good