User:M.thoriyan/Sandbox

Key Terms
Abnormal profits (HL)
 * Profit that exceeds economic profit, which includes accounting costs and opportunity costs. Also referred to as "supernormal profits"

Accounting cost/profit (HL)
 * Profit calculated by adding together all forms of revenue and subtracting explicit costs of doing business such as depreciation, interest, and taxes. This does not include opportunity costs.

Ad valorem tax
 * An indirect tax based on the value of an economic good acquired. This may be in the form of sales taxes, value-added taxes, property taxes, and more.

Allocative efficiency (HL)
 * A situation that occurs when no resources are wasted: no one can be made better off without making someone else worse off.

Average costs (HL)
 * Total costs divided by number of units produced.

Average revenue (HL)
 * Total revenue divided by number of units produced.

Barriers to entry (HL)
 * Barriers that make it difficult for new firms to enter an industry and compete with existing producers or suppliers.

Break even price (HL)
 * The price at which average revenue and average costs are equal. This makes it so that normal profit is achieved.

Buffer stock scheme
 * An organization, usually run by producers or the government, that attempts to smooth out fluctuations in price and therefore also the income of producers.

Cartel (HL)
 * A group of producers that enter a collusive agreement to restrict output in order to increase prices, demand, and profit.

Collusive oligopoly (HL)
 * Where a group of oligopolists determine a co-ordinated price in order to avoid price wars.

Commodity
 * An economic good that is supplied without qualitative differentiation across a market. For example, gold, copper, and steel are commodities because they are virtually the same from every producer.

Commodity agreements
 * An international agreement to stabilize commodity prices in the best interest of producers and consumers. This includes mechanisms to influence market prices by adjusting export quotas and production, as well as employing buffer stocks.

Contestable market (HL)
 * A market with free or low barriers to entry, so that the firms in the industry face competition from potential entrants.

Cross price elasticity
 * The percentage change in the demand for one good divided by the percentage change in the price of a related good. This allows a measure of the responsiveness to the change in one good's quantity to another good's price.

Demand
 * The relationship between the quantity demanded of a good or service and its price.

Demerit goods
 * Goods that have negative externalities, or have been decided by the political process as socially undesirable.

Direct tax
 * A tax paid directly to the government from the taxed individual. For example, income taxes are generally paid directly to the government.

Diseconomies of scale (HL)
 * Where as a company expands in its factors of production, the company suffers increased marginal costs and decreased marginal productivity.

Economic cost/profit (HL)

Economies of scale (HL)

Elasticity

Elastic demand

Elastic supply

Equilibrium price

Externalities

Fixed costs (HL)

Flat rate tax (specific tax)

Giffen goods (HL)

Incidence of tax

Income elasticity

Indirect tax

Inelasticity

Inelastic demand

Inelastic supply

Inferior goods

Law of demand

Law of diminishing average returns (HL)

Law of diminishing marginal returns (HL)

Law of supply

Long run (HL)

Market

Market failure

Market success

Marginal costs (HL)

Marginal revenue (HL)

Maximum price

Merit goods

Minimum price

Monopolistic competition (HL)

Monopoly (HL)

Natural monopoly (HL)

Negative externalities

Non-collusive oligopoly (HL)

Normal goods

Normal profits (HL)

Oligopoly (HL)

Perfect competition (HL)

Positive externalities

Price discrimination (HL)

Price elasticity of demand

Price elasticity of supply

Product differentiation (HL)

Productive efficiency (HL)

Profit-maximizing level of output (HL)

Public goods

Quotas

Short run (HL)

Shut down price (HL)

Subsidy

Supply

Sustainable development

Total costs (HL)

Total revenue (HL)

Tradeable permits

Variable costs (HL)

Veblen goods (HL)