A level Microeconomics key terms

Eliminates excess within a market as it naturally moves towards the equilibrium price

Subjective statements, they carry valid judgements about what ought to be

Resources that are finite in supply

The price at which supply = demand

When changes in price encourage buyers and sellers to change the quantity they buy and sell

The quantity that consumers are willing and able to buy at a given price in a given amount of time

A compulsory contribution to state revenue

Tax on all types of income. Paid directly by the payee

The difference between the price you are willing to pay for a product and the price you paid for it

Objective statements that can be tested, amended or rejected by referring to available evidence

Total satisfaction from a given level of consumption

One person using it does not reduce the amount avilable for others

The responsiveness of quantity demanded to a change in income

Tax on consumption, paid by the final consumer

Government grants firms money in order to increase supply or lower price

Goods that participate to more than one cycle of consumption

Quantity demanded for this good decreases when income increases

The inputs available to supply goods and services in an economy

The responsiveness of quantity demanded of good Y to a change in price of good X

Shows the maximum amount that can be produced of two given goods

Effects that occur on a third party outside of a transaction

The cost or impact of a negative externality on the 3rd party

Consumers and firms react to price change, If prices rise, firms should produce more. If prices fall, consumers should consume more

A fall in price increases the real purchasing power of consumers

The cost of the next best alternative forgone

When changes in price lead to more or less being produced, so increasing or limiting the quantity demanded by buyers

When markets don't provide a good or service at all

Once provided, people cannot reject it

The responsiveness of supply to a change in price

The utlity decreases the more we use it

Goods that improve efficiency and productive potential of an economy in the long run

An inefficeint distribution of goods and services in the free market

The quantity of a good or service that producers are willing and able to offer for sale at each possible price in given time periods

The difference between the price you are willing to sell at and the price you actually sell at

Once provided, it's impossible to stop someone from using it without paying

Exists where goods have more than one use

The demand for a factor of production used to produce a good or service

The change in satisfaction from consuming an extra unit

Resources that are replaceable over time

Typically goods that are provided by the government

When people have inaccurate or incomplete data and so make wrong choices and decisions

Set tax per unit

The responsiveness of quantity demanded to a change in price

The cost of borrowing and reward for saving

The quantity demand for this good increases (Less than proportionally) when income increases

A percentage tax