Microeconomics Terms
Buffer stock scheme: is an attempt to use commodity storage for the purposes of stabilizing prices in an entire economy or, more commonly, an individual (commodity) market
Commodity: a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.
Commodity agreements are international agreements designed to stabilise commodity prices in the interest of producers and consumers.
Cross price elasticity
Demand: The quantity of a good buyers wish to purchase at each possible price
Demerit goods: Goods that are bad for society; socially undesirable (ex. Alcohol, drugs, cigars).
Direct tax
Elasticity: measures response. The change that one thing influences on the other.
Elastic demand: refers to how sensitive the demand for a good is to changes in other economic variables
Elastic supply: supply of a good or service that increases or decreases as the price of an item goes down or up.
Equilibrium price: the amount demanded exactly meets demand supplied.
Externalities: Costs and benefits not reflected in free market prices. Costs or benefits on others who are not responsible for initiating the effect
Income elasticity
Indirect tax: A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products.
Inelasticity: describes the situation in which the supply and demand for a good are unaffected when the price of that good or service changes
Inelastic demand: Price has a small effect on demand.
Inelastic supply:
Inferior goods: Goods, in which if income elasticity is negative, demand falls as real income rises.
Law of demand
Law of supply
Market: Any effective arrangement for bringing buying and sellers together. Supply and demand meet and react in a market. Prices are established and buyers and sellers give signals.
Market failure: When market forces alone fail to allocate scarce resources efficiently. Meaning too much or too little of a product is
Commodity: a raw material or primary agricultural product that can be bought and sold, such as copper or coffee.
Commodity agreements are international agreements designed to stabilise commodity prices in the interest of producers and consumers.
Cross price elasticity
Demand: The quantity of a good buyers wish to purchase at each possible price
Demerit goods: Goods that are bad for society; socially undesirable (ex. Alcohol, drugs, cigars).
Direct tax
Elasticity: measures response. The change that one thing influences on the other.
Elastic demand: refers to how sensitive the demand for a good is to changes in other economic variables
Elastic supply: supply of a good or service that increases or decreases as the price of an item goes down or up.
Equilibrium price: the amount demanded exactly meets demand supplied.
Externalities: Costs and benefits not reflected in free market prices. Costs or benefits on others who are not responsible for initiating the effect
Income elasticity
Indirect tax: A tax that increases the price of a good so that consumers are actually paying the tax by paying more for the products.
Inelasticity: describes the situation in which the supply and demand for a good are unaffected when the price of that good or service changes
Inelastic demand: Price has a small effect on demand.
Inelastic supply:
Inferior goods: Goods, in which if income elasticity is negative, demand falls as real income rises.
Law of demand
Law of supply
Market: Any effective arrangement for bringing buying and sellers together. Supply and demand meet and react in a market. Prices are established and buyers and sellers give signals.
Market failure: When market forces alone fail to allocate scarce resources efficiently. Meaning too much or too little of a product is