Economics Vocabulary review

Substitution effect occurs when changes in relative prices cause buyers to replace the purchase of 1 product w/ another

Factors of production are human & natural resources & capital goods

A market structure in which there are relatively few sellers & industry leaders usually determine prices

Manufactured or constructed items that are used in the production of goods & services (buildings, machinery)

Usefulness created by altering or changing the form or shape of a good to make it more useful to the consumer

A form of demand in which changes in price does not affect demand is called inelastic demand

Giving up all or a part of one thing in order to get something else.

An utility is capable of satisfying wants and needs

Exchange is the process of trading goods/services for free

All of the expenses involved in running a business

The benefit that is lost when you decide to use scarce resources for one purpose rather than for another (

Time utility is the usefulness created when products are made available at the time they are needed or wanted

A producer is a person who makes or provides goods and services.

Perils caused by human errors as well as the unpredictability of customers, employees, or the work environment

Relative prices that determines who gets goods & services produced, determining how scarce resources will be distributed

Risk that result from changes in overall business conditions is call Economic Risk

The process of trading one good/service for another is exchange (money for gas)

A form of demand for products in which changes in price correspond to changes in demand (New I-Phone)

Chances of loss that may result in loss, no change, or gain.

Actual price that prevails in a market at any particular moment (price of a new I-Phone)

Place utility is usefulness created by making sure goods or services are available where they are needed or wanted

A condition resulting from the gap between unlimited wants for goods & services & limited resources is scarcity

The amount of money paid for a good, service, or resource

An indication of how changes in price will affect changes in the amounts demanded & supplied.

An indication of how changes in price will affect change in the amount demanded & supplied (toilet paper price went up)