Economics Vocabulary

2. a government payment to an individual, business, or other group to encourage or protect a certain type of economic activity.
4. the extra revenue associated with the production and sale of one additional unit of output.
7. the principle that suppliers will normally offer more for sale at higher prices and less at lower prices.
8. the theory of _______ deals with the relationship between the factors of production and the output of goods and services.
9. demand is _______ when a given change in prices causes a larger change in quantity demanded.
13. the cost that a business incurs even if the plant is idle and output is zero is known as _______ cost.
14. can be used in place of another product.
16. a type of cost-benefit decision making that compares the extra benefits to the extra costs of an action.
17. the number of units sold multiplied by the average price per unit.
19. the extra usefulness or satisfaction that someone receives from using a product.
20. demand is _______ when a given change in prices causes a smaller change in quantity demanded.
22. a graph showing the various quantities supplied at each price that might prevail in the market.
23. the extra cost incurred when a business produces one additional unit of a product is known as _______ cost.
24. states that the quantity demanded of a good or service varies inversely with the price.

1. an economic principle referring to a consumer's desire to purchase goods and services and willingness to pay a price for a specific good or service.
2. a period of production that allows producers to change only the amount of variable input is known as the _______ run.
3. the use of one product increases the use of another.
5. the measure of responsiveness that tells us how a dependent variable responds to a change in the independent variable.
6. the amount of a product that would be offered for sale at all possible prices that could prevail in the market.
10. the change in quantity demanded because of a change in price that alters consumers’ real income.
11. area of economics that deals with behavior and decision making by small units, such as individuals and firms.
12. the change in quantity demanded because of a change in the relative price of a good.
15. a cost that changes when the business rate of operation or output changes is known as _______ cost.
18. a period of production that allows producers to adjust the quantities of all their resources is known as the _______ run.
21. a graph showing the quantity demanded at each price that might prevail in the market.