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235 terms from Microeconomics, each defined in a sentence or two, with the part of the syllabus where you first meet it. 101 of them are HL only, and marked.
Profit above normal profit, earned when total revenue exceeds total economic cost, or when average revenue is greater than average cost (AR > AC).
An indirect tax charged as a fixed percentage of the price of a good, so the tax per unit rises with the price and the supply curve pivots upwards.
A form of asymmetric information arising before a transaction, in which the party with hidden information about quality or risk is the most willing to trade, so the other party attracts mainly bad risks or low-quality goods.
A situation in which resources produce the mix and quantity of goods society values most; in a market it occurs where marginal benefit equals marginal cost and social surplus is maximised.
A bias in which people rely too heavily on the first piece of information they receive, such as an initial price, when making a judgment or decision.
A situation in which one party to a transaction has more or better information than the other, leading to a misallocation of resources.
A bias in which people judge the likelihood or importance of an event by how easily examples come to mind, so recent, vivid or heavily reported events are overestimated.
Total cost per unit of output, found by dividing total cost by the quantity produced (AC = TC ÷ Q); also called average total cost.
Total revenue per unit sold, found by dividing total revenue by the quantity sold (AR = TR ÷ Q); it equals the price, so the AR curve is the firm's demand curve.
Total variable cost per unit of output, found by dividing total variable cost by the quantity produced (AVC = TVC ÷ Q).
Obstacles that make it difficult or impossible for new firms to enter a market, such as economies of scale, patents, licences, control of key resources or strong brand loyalty.
The idea that people try to make rational decisions but are limited by incomplete information, limited time and limited ability to process information, so they choose satisfactory rather than best options.
The limited ability of people to carry out decisions in their long-term interest, because they give too much weight to immediate costs and benefits compared with future ones.
The idea that people are not purely self-interested but also care about fairness and others’ well-being, sometimes acting against their narrow interest to help others or punish unfairness.
A store of a commodity that the government buys when supply is high to support the price and sells when supply is low to stop the price rising, to stabilise prices.
Income received from owning assets rather than from working, such as interest, dividends, rent and profit.
The shift of production and emissions from a country with strict carbon pricing to countries with weaker rules, so that global emissions fall less than domestic emissions.
A tax on the carbon content of fossil fuels, or on each tonne of carbon dioxide emitted, intended to make polluters pay for the external cost of greenhouse gas emissions.
A formal agreement between firms, or countries, to act together as if they were a single monopoly, usually by fixing prices or setting output quotas.
The way choices are presented to people, including the number and order of options, how they are described and which applies if a person does nothing, which influences decisions.
A good that is excludable but non-rivalrous, at least until it becomes congested, so it can be sold to members or subscribers, for example a streaming service.
A systematic, predictable error in thinking that leads people to make decisions different from those the rational choice model predicts.
The management of a common pool resource by its own users, who agree, monitor and enforce rules on its use without relying mainly on government or private ownership.
An agreement, formal or informal, between firms in a market to limit competition, for example by fixing prices, limiting output or sharing out customers.
Government rules backed by law that require or forbid certain behaviour by firms or consumers, such as bans, quotas, standards or age limits, enforced through penalties.
Large and frequent rises and falls in the prices of primary commodities, caused mainly by shifts in demand or supply in markets where both are price inelastic.
A natural resource that is rivalrous but non-excludable, such as fish in the open sea, groundwater or forests, so that it tends to be overused and depleted.
The situation where producers can use the same resources to make one good or another, such as wheat or barley, so that producing more of one means producing less of the other.
Goods that are used together, so that a rise in the price of one reduces the demand for the other.
The combined market share of the largest firms in a market, for example the four-firm concentration ratio (CR4), used to measure how far a market is dominated by a few firms.
The difference between the highest price consumers are willing and able to pay for a good and the price they actually pay; the area below the demand curve and above the price.
An arrangement in which the government pays a private firm, usually chosen by competitive tender, to supply a good or service that the government still funds and is responsible for.
A method of appraising a project by placing money values on all its expected private and external costs and benefits over time, used to decide whether, and how much of, a public good to provide.
The payments a firm makes for the factors of production and other inputs it uses, such as wages, rent, raw materials and energy.
An option that applies automatically unless a person actively chooses a different one, for example being enrolled in a pension scheme unless the worker opts out.
The quantities of a good or service that consumers are willing and able to buy at each possible price during a given time period, ceteris paribus.
A graph showing the quantity demanded of a good at each possible price, ceteris paribus; it normally slopes downwards from left to right.
A table listing the quantity of a good demanded at each of a range of prices, for one consumer or for the whole market, ceteris paribus.
A good or service that is more harmful to people than they realise, such as cigarettes or alcohol, so it is overconsumed in a free market; it often has negative consumption externalities.
A government-backed guarantee that bank depositors will be repaid up to a set limit if their bank fails, which prevents bank runs but can create moral hazard.
Demand for a factor of production that comes from the demand for the goods and services it helps to produce, such as the demand for builders arising from the demand for new homes.
The factors that decide how price elastic demand for a good is: the number and closeness of substitutes, the degree of necessity, the proportion of income spent on it, and time.
The supply of goods or services by the government itself, financed from tax revenue and usually provided free or at a low price, such as state schools and public hospitals.
Rises in long-run average cost that occur when a firm grows beyond a certain size, for example because of problems with coordination, communication and motivation.
A situation in a market where quantity demanded and quantity supplied are not equal at the current price, so there is excess demand or excess supply and pressure for the price to change.
The way a country’s total income is shared between individuals or households over a period, usually a year.
The way the total stock of assets in an economy, net of debts, is shared between individuals or households at a point in time.
A strategy that gives a player the best payoff whatever strategy the other player chooses.
Differences in the way income or wealth is shared out between individuals or households in an economy; the larger the differences, the greater the inequality.
Falls in long-run average cost that occur as a firm increases its scale of production, for example through specialisation, bulk buying or cheaper finance.
Government campaigns and information that change people’s knowledge of a good’s costs or benefits, so as to raise demand for merit goods and lower demand for demerit goods.
A measure of how responsive one economic variable is to a change in another, calculated as the percentage change in the first divided by the percentage change in the second.
A curve showing the relationship between consumers' income and the quantity demanded of a good, with all other influences on demand held constant.
The gap between the output a firm in monopolistic competition produces in long-run equilibrium and the output at which its average cost would be lowest.
The situation where, at the current price, quantity demanded is greater than quantity supplied; it arises when the price is below the equilibrium price.
The situation where, at the current price, quantity supplied is greater than quantity demanded; it arises when the price is above the equilibrium price.
Describes a good from which people who do not pay can be prevented from benefiting, for example by charging an entry price.
A cost or benefit of producing or consuming a good that falls on a third party not directly involved in the transaction and is not reflected in the market price.
Costs of production that do not change with the level of output in the short run, such as rent, insurance and interest on loans; they must be paid even if output is zero.
A bias in which people’s decisions are influenced by the way information or options are presented, rather than only by the information itself.
The situation in which people benefit from a good without paying for it, because they cannot be excluded, so private firms cannot collect enough revenue and the good is under-provided or not provided.
Consumers’ or producers’ beliefs about what the price of a good will be in the future, which affect how much they buy or sell today.
The study of strategic decision-making by interdependent players, where the outcome for each player depends on its own choices and on the choices of the others.
A rare type of inferior good, usually a staple food for very poor households, for which a rise in price leads to a rise in quantity demanded because the income effect outweighs the substitution effect.
The situation where a government intervention leads to a less efficient allocation of resources, or a worse outcome, than the market would have produced without it.
The income a government receives, mainly from direct and indirect taxes, but also from fees, sales of goods and services, and the profits of state-owned enterprises.
The business objective of increasing a firm’s size, measured by sales, output, assets or employees, through internal expansion or by merging with or taking over other firms.
Products that are identical in the eyes of buyers, so that a buyer has no reason to prefer one seller's product to another's except on price.
Any market structure between perfect competition and pure monopoly, such as oligopoly and monopolistic competition, in which firms have some market power and are price makers.
A situation in which consumers or producers lack full or accurate knowledge of the prices, quality or characteristics of goods, so their decisions may not maximise utility or profit.
The role of prices in motivating consumers and producers to change their behaviour, for example a higher price encouraging firms to produce more and consumers to buy less.
The change in quantity demanded that results from a change in consumers’ real income (purchasing power) when the price of a good changes.
Demand for which the percentage change in quantity demanded is larger than the percentage change in income, so that YED is greater than 1; typical of luxury goods and many services.
A measure of the responsiveness of the demand for a good to a change in consumers' income, ceteris paribus: the percentage change in quantity demanded divided by the percentage change in income.
Demand for which the percentage change in quantity demanded is smaller than the percentage change in income, so that YED lies between 0 and 1; typical of necessities.
A tax on spending on goods and services, paid to the government by the seller, which raises firms' costs and shifts the supply curve upwards.
A good for which demand falls when consumers’ incomes rise and rises when incomes fall, ceteris paribus, usually because buyers switch to better-quality alternatives.
The situation where consumers or producers lack the information they need to make choices that serve their own interest, such as underestimating the harm from smoking.
Wealth passed from one person to another, usually from parents to children, on the death of the owner, together with large gifts made during life.
Treaties or accords between countries in which they agree to take joint action, such as limiting emissions, on problems that no single country can solve alone.
The situation where producing one good automatically produces another, such as beef and leather, so that a rise in the supply of one increases the supply of the other.
The principle that, ceteris paribus, as the price of a good rises the quantity demanded falls, and as the price falls the quantity demanded rises: an inverse relationship.
The principle that, in the short run, as more units of a variable factor are added to a fixed factor, the extra output from each additional unit of the variable factor eventually falls.
The principle that, as a consumer consumes more units of a good in a given period, the additional satisfaction gained from each extra unit eventually falls.
The principle that, ceteris paribus, as the price of a good rises the quantity supplied rises, and as the price falls the quantity supplied falls: a positive relationship.
A government requirement that producers or professionals meet set standards and hold a permit before they may sell a product or practise, which gives buyers an assurance of minimum quality.
The period of time in which all factors of production can be varied, so firms can change their scale of production and firms can enter or leave a market.
The situation in which total revenue is less than total economic cost, so the firm earns less than normal profit; shown by average revenue below average cost (AR < AC).
The tendency for people to feel a loss more strongly than a gain of the same size, so they act to avoid losses more than to achieve equal gains.
A normal good with income elastic demand, so that YED is greater than 1 and spending on it rises faster than income.
A form of choice architecture in which people must state their decision before they can proceed, so they cannot avoid the choice and no option is preselected.
A good produced in the secondary sector by processing raw materials and components, such as a car, a smartphone or a chocolate bar.
The additional benefit consumers receive from consuming one more unit of a good, measured by the maximum price they are willing to pay for it; shown by the demand curve.
The additional cost to a firm of producing one more unit of output.
The extra benefit to a consumer of consuming one more unit of a good; the demand curve shows it.
The extra cost to a producer of producing one more unit of a good; in a competitive market the supply curve shows it.
The additional output produced when one more unit of a variable factor of production, such as one more worker, is employed.
The additional revenue a firm earns from selling one more unit of output (MR = ΔTR ÷ ΔQ).
The additional satisfaction (utility) a consumer gains from consuming one more unit of a good or service.
The total quantity of a good demanded by all consumers in a market at each price, found by adding the quantities that individual consumers demand at that price.
The situation in a market where quantity demanded equals quantity supplied, so there is no tendency for the price or the quantity traded to change; it occurs at the market-clearing price.
The situation where a free market fails to allocate resources efficiently, so that too much or too little of a good is produced and consumed compared with the socially optimal output.
George Akerlof’s 1970 model of a market where buyers cannot tell good products from bad ones, so they pay only an average price, good-quality sellers withdraw and the market shrinks or collapses.
The ability of a firm to influence the price of the good it sells, by changing its output or its price, rather than accepting the price set by the market.
The characteristics of a market that shape how firms behave in it, such as the number and size of firms, how similar their products are and how easily new firms can enter.
The total quantity of a good supplied by all producers in a market at each price, found by adding the quantities that individual firms supply at that price.
A good or service that is better for people than they realise, such as education or healthcare, so it is underconsumed in a free market; it often has positive consumption externalities.
A price floor in the labour market: the lowest wage rate per hour that employers may legally pay workers, usually set above the market equilibrium wage.
The ease with which factors of production, such as labour and capital, can be moved from one use, firm or place to another; greater mobility makes supply more price elastic.
A market structure with many firms selling differentiated products, with free entry and exit, so that each firm has a small degree of market power.
A market structure in which a single firm, or one dominant firm, supplies the whole market for a product with no close substitutes, protected by high barriers to entry.
A form of asymmetric information arising after a transaction, in which one party takes more risk or less care because another party bears part of the cost and cannot fully observe its behaviour.
A change in the quantity demanded caused only by a change in the good’s own price, shown as a move from one point to another on the same demand curve.
A change in the quantity supplied caused only by a change in the good’s own price, shown as a move from one point to another on the same supply curve.
An outcome of a game in which no player can improve its payoff by changing its strategy, given the strategy chosen by the other player.
A market in which long-run average cost falls over the whole range of market demand, so one firm can supply the market at a lower average cost than two or more firms could.
A normal good with income inelastic demand, so that YED lies between 0 and 1 and spending on it rises more slowly than income.
A cost of producing or consuming a good that falls on third parties and is not paid for by the producer or consumer, so the good is overproduced or overconsumed.
An external cost created when a good is consumed, borne by third parties, so that marginal social benefit is less than marginal private benefit, as with second-hand smoke or traffic congestion.
An external cost created when a good is produced, borne by third parties, so that marginal social cost is greater than marginal private cost, as when a factory pollutes a river.
An oligopoly in which firms do not cooperate but compete with each other, while taking account of how their rivals are likely to react.
A characteristic of a good when it is impossible, or too costly, to prevent people who have not paid for it from using it.
Competition between firms by means other than price, such as advertising, branding, product quality, design, packaging, after-sales service and loyalty schemes.
The factors other than the good’s own price that affect how much consumers want to buy, such as income, tastes, expectations, the prices of related goods and the number of consumers; a change in one shifts the demand curve.
The factors other than the good’s own price that affect how much producers offer for sale, such as costs of factors of production, technology, taxes and subsidies, related goods, expectations and the number of firms.
Allocating a good in short supply by a method other than price, such as queuing, waiting lists, lotteries, ration coupons or sellers' preferences.
A characteristic of a good whose consumption by one person does not reduce the amount available for others to consume, so the marginal cost of an extra user is zero.
A good for which demand rises when consumers’ incomes rise and falls when incomes fall, ceteris paribus.
The minimum profit a firm needs to keep its resources in their current use, counted as part of its economic costs; it is earned when average revenue equals average cost (AR = AC).
A change in the way choices are presented that steers people towards a particular decision without forbidding any option or significantly changing financial incentives.
A market structure dominated by a few large firms, protected by high barriers to entry, whose decisions on price and output are interdependent.
The situation where more resources are used to produce a good than is socially optimal, so output is above the level where MSB = MSC.
An illegal market in which a good subject to a price control is bought and sold at a price above the legal maximum, usually because the control has caused a shortage.
The international climate treaty adopted in December 2015 under which countries aim to keep global warming well below 2 °C and set their own national emissions pledges.
A legal right that gives the inventor of a new product or process the sole right to make, use and sell it for a fixed period, usually 20 years.
A table showing the outcome (payoff) for each player of every combination of the strategies the players can choose.
The change in a variable expressed as a percentage of its original value: the new value minus the original value, divided by the original value, multiplied by 100.
A market structure with very many small firms selling identical (homogeneous) products, with free entry and exit and perfect information, so that each firm is a price taker.
The assumption that all consumers and producers have complete and accurate knowledge of the prices, quality and characteristics of every good and service, at no cost.
Demand for which any rise in price above the current level causes quantity demanded to fall to zero, so that PED is infinite and the demand curve is horizontal.
Supply for which producers will supply any quantity at a given price but none at a lower price, so that PES is infinite and the supply curve is horizontal.
Demand for which quantity demanded does not change at all when price changes, so that PED is zero and the demand curve is vertical.
Supply for which quantity supplied does not change when price changes, so that PES is zero and the supply curve is vertical.
A good that cannot be stored for long without losing its value, such as fresh fruit, fish or cut flowers, so that its supply cannot respond quickly to price.
An indirect tax set to equal the external cost of a good at the socially optimal output, so that producers or consumers pay the full social cost and output falls to where MSB = MSC.
The principle that those who cause pollution should bear its costs, for example through taxes, charges or the purchase of permits.
A benefit of producing or consuming a good that is enjoyed by third parties who do not pay for it, so the good is underproduced or underconsumed.
An external benefit created when a good is consumed, enjoyed by third parties, so that marginal social benefit is greater than marginal private benefit, as with vaccination or education.
An external benefit created when a good is produced, enjoyed by third parties, so that marginal social cost is less than marginal private cost, as when a firm trains workers who later move to other firms.
The tendency to give too much weight to costs and benefits that occur now compared with those in the future, leading to choices people later regret, such as undersaving.
A legal maximum price set by the government below the equilibrium price, above which a good or service may not be sold; it creates excess demand (a shortage).
Demand for which the percentage change in quantity demanded is larger than the percentage change in price, so that PED is greater than 1, ignoring the minus sign.
Supply for which the percentage change in quantity supplied is larger than the percentage change in price, so that PES is greater than 1.
A measure of the responsiveness of the quantity demanded of a good to a change in its own price, ceteris paribus: the percentage change in quantity demanded divided by the percentage change in price.
A measure of the responsiveness of the quantity supplied of a good to a change in its price, ceteris paribus: the percentage change in quantity supplied divided by the percentage change in price.
A legal minimum price set by the government above the equilibrium price, below which a good or service may not be sold; it creates excess supply (a surplus).
Demand for which the percentage change in quantity demanded is smaller than the percentage change in price, so that PED lies between 0 and 1, ignoring the minus sign.
Supply for which the percentage change in quantity supplied is smaller than the percentage change in price, so that PES lies between 0 and 1.
A firm with market power that can set its own price, facing a downward-sloping demand curve, so that it can sell more only by lowering its price.
The system in which the interaction of demand and supply sets prices, and changes in prices guide the decisions of consumers and producers about what, how much and for whom to produce.
A firm that has no influence over the market price and must accept the price set by market demand and supply, as in perfect competition.
A period of repeated price cuts by rival firms, each trying to win market share from the others, which can push prices down to or below average cost.
A raw material or agricultural product produced in the primary sector and traded with little or no processing, such as crude oil, copper, wheat or coffee.
The part of the economy that extracts or grows natural resources, including agriculture, fishing, forestry and mining.
A situation in which one party (the agent) acts on behalf of another (the principal) but has different objectives and better information, so the agent may not act in the principal’s interest.
A game in which each player's dominant strategy leads to an outcome that is worse for both players than the one they would reach if they could trust each other to cooperate.
A good that is both rivalrous and excludable: one person’s consumption leaves less for others, and people who do not pay can be prevented from consuming it.
The difference between the price producers receive for a good and the lowest price at which they are willing to supply it; the area above the supply curve and below the price.
Making a product different from rival products, in reality or in the minds of consumers, through design, quality, branding, packaging, location or service.
The situation in which a firm does not produce at the lowest possible average cost, either because its output is not at minimum AC or because it wastes resources.
The business objective of producing the output at which the difference between total revenue and total cost is greatest, where marginal revenue equals marginal cost.
A government response to asymmetric information that makes sellers disclose, or itself publishes, information about products, for example compulsory labelling, quality ratings or published inspection results.
A good that is both non-rivalrous and non-excludable, so one person’s use does not reduce the amount available to others and non-payers cannot be prevented from using it, for example national defence.
A long-term contract in which a private firm finances, builds and often operates public infrastructure, such as a hospital, and the government pays it over many years.
The amount of a good or service that consumers are willing and able to buy at one particular price during a given time period.
The amount of a good or service that producers are willing and able to sell at one particular price during a given time period.
A good that has some, but not all, of the characteristics of a public good, for example a road that is non-excludable but becomes rivalrous when congested.
The model in which consumers logically compare the costs and benefits of every option, with full information, and choose the combination of goods that maximises their utility given their income.
The role of prices in distributing scarce goods: a rising price reduces quantity demanded until it equals the quantity available, so the good goes to those willing and able to pay.
Spending by firms or governments on investigating and developing new products and new methods of production.
The way scarce factors of production are assigned to producing different goods and services; in a market economy it is decided by the price mechanism through signalling and incentives.
A form of choice architecture in which the number or type of options available is limited, to make decisions simpler or steer people away from options that may harm them.
Describes a good whose consumption by one person reduces the amount available for others, such as a fish caught from the sea.
A simple mental shortcut used to make a decision quickly, instead of comparing all the costs and benefits of every option; also called a heuristic.
A business objective in which a firm aims for a satisfactory level of profit, or a satisfactory outcome across several goals, rather than the maximum possible profit.
Action taken by the less-informed party to find out the hidden information of the other party, for example a medical check before life insurance or a test before hiring.
The part of the economy that processes raw materials into manufactured goods, including manufacturing and construction.
A change in the shares of output and employment produced by the primary, secondary and tertiary sectors, usually from primary to secondary and then tertiary as incomes rise.
A change in the quantity demanded at every price, caused by a change in a non-price determinant of demand; an increase shifts the curve right and a decrease shifts it left.
A change in the quantity supplied at every price, caused by a change in a non-price determinant of supply; an increase shifts the curve right and a decrease shifts it left.
The period of time in which at least one factor of production, usually capital such as buildings and machinery, is fixed in quantity.
The price equal to the minimum of average variable cost, below which a firm minimises its losses in the short run by stopping production.
Action taken by the better-informed party to show its quality to the less-informed party, for example offering a warranty or obtaining a qualification.
The role of prices in passing information to consumers and producers about changes in market conditions, such as a rise in demand or a fall in supply.
The situation in which a firm or industry produces less than it could with its existing factors of production, so that output can be increased quickly without new investment.
An indirect tax of a fixed amount of money per unit of a good sold, which shifts the supply curve upwards by the amount of the tax, parallel to the original curve.
Individuals or groups affected by an economic decision or policy, such as consumers, producers, workers, the government and society as a whole.
A business that is owned and controlled by the government rather than by private shareholders, such as many electricity, water and railway companies.
The tendency for people to stay with their current situation or a default option, even when switching would make them better off; a form of inertia.
A payment by the government to producers, usually per unit of output, that lowers their costs and shifts the supply curve downwards, raising output and lowering the price.
Goods that can be used in place of each other, so that a rise in the price of one increases the demand for the other.
The change in quantity demanded that results from a good becoming relatively cheaper or dearer than its substitutes when its price changes.
The tendency in some markets for a few top performers to earn a very large share of total income, because technology lets them serve a mass market and buyers strongly prefer the best.
The quantities of a good or service that producers are willing and able to offer for sale at each possible price during a given time period, ceteris paribus.
A graph showing the quantity supplied of a good at each possible price, ceteris paribus; it normally slopes upwards from left to right.
A table listing the quantity of a good supplied at each of a range of prices, for one producer or for the whole market, ceteris paribus.
Cooperation between firms without any formal or explicit agreement, for example when firms follow the price changes of a price leader.
How the burden of an indirect tax is shared between consumers, through a higher price paid, and producers, through a lower price received; it depends on PED and PES.
The part of the economy that provides services, such as retail, transport, finance, education, health care and tourism.
A person, firm or group that is not directly involved in buying or selling a good but is affected by its production or consumption.
The expectation that a government will rescue a very large financial institution because its collapse would damage the whole economy, which creates moral hazard by reducing the institution’s cost of risk-taking.
The sum of all the costs a firm incurs to produce a given level of output: total fixed costs plus total variable costs (TC = TFC + TVC).
The total quantity of output a firm produces with a given quantity of factors of production in a period.
The total amount of money a firm receives from selling its output, equal to the price multiplied by the quantity sold.
The total satisfaction a consumer gains from consuming a given quantity of a good or service in a period.
A scheme in which a government caps total pollution, issues permits to emit up to the cap, and lets firms buy and sell the permits, so emissions are cut where it is cheapest to do so.
The overuse and depletion of a common pool resource that happens when each user, acting in their own interest, takes more of it because the cost of depletion is shared by all users.
The situation where fewer resources are used to produce a good than is socially optimal, so output is below the level where MSB = MSC.
Demand for which the percentage change in quantity demanded equals the percentage change in price, so that PED is exactly 1 and total spending does not change when price changes.
Supply for which the percentage change in quantity supplied equals the percentage change in price, so that PES equals 1, as on any straight supply curve through the origin.
The assumption that consumers use their limited income to buy the combination of goods and services that gives them the greatest possible total satisfaction.
An ad valorem indirect tax charged as a percentage of the value added at each stage of production and distribution, and paid in full by the final consumer in the price.
Costs of production that change with the level of output, such as raw materials, energy and the wages of hourly workers; they are zero when output is zero.
A luxury good bought partly to display wealth or status, for which a higher price can make the good more desirable to some buyers.
The difference between the wage rates paid to different groups of workers, caused by differences in the demand for and supply of each type of labour and in their bargaining power.
The total value of the assets owned by an individual or household at a point in time, such as property, savings, shares and land, minus any debts; a stock rather than a flow.
The loss of social surplus that occurs when a market produces a quantity other than the allocatively efficient one, so some value is lost to society; also called deadweight loss.
The sum of consumer surplus and producer surplus in a market, measuring the total benefit buyers and sellers gain from trading a good; also called community surplus.