Brielle McCray
Ms. White
Fund. Concepts
Microeconomics
1. Customer Wants- Unfulfilled desire; Unwilling and detrimental lack of life's necessities.
2. Law of Demand- Observation that, as a general rule, the demand for a product varies inversely with its price lower prices stimulates demand and higher prices dampen it. Law of demand holds in most instances, except in case of Geffen good.
3. Law of Supply- as demand increases the price goes up which attracts new suppliers who increase the supply bringing the price back to normal.
4. Market Demand-Aggregate of the demands of all potential customers (market participants) for a specific product over a specific period in a specific market.
5. Market Equilibrium-Situation where the supply of an item is exactly equal to its demand. Since neither there is surplus nor shortage in the market, there is no innate tendency for the price of the item to change.
6. Utility-Pleasure or satisfaction (value for money) derived by a person from the consumption of a good or service or from being in a particular place, and for the maximization of which all economic actions are motivated.
7. Scarcity-Ever-present situation in all markets whereby either less goods are available than the demand for them, or only too little money is available to their potential buyers for making the purchase.
8. Opportunity Cost- Giving up one thing in order to gain another.
9. Production- Processes and methods employed in transformation of tangible inputs (raw materials, semi-finished goods, or subassemblies) and intangible inputs (ideas, information, know how) into goods or services.
10. Maximization-Choosing the alternative with the best or highest expected outcome, without regard to cost or expense
11. Elasticity-Measure of the responsiveness of demand and supply of a good or service to an increase or decrease in its price.
12. Degree of Competition-pressure from other businesses to keep prices down.
