c


 







 : Economics is the social science that analyzes the production, distribution, and
consumption of goods and services. Economics aims to explain how economies work and how
economic agents interact. Economic analysis is applied throughout society, in business, finance
and government, but also in crime, education, the family, health, law, politics, religion, social
institutions, war, and science. The expanding domain of economics in the social sciences has
been described as economic imperialism.

 : In economics a good is a product that can be used to satisfy some desire or need. More
narrowly but commonly, a good is a tangible physical product that can be contrasted with a
service which is intangible. As such, it is capable of being delivered to a purchaser and involves
the transfer of ownership from seller to customer.
   An ordinary good is a microeconomic concept used in consumer theory. It is
defined as a good which creates increased demand when the price for the good drops or
conversely decreased demand if the price for the good increases, „
 .
a 
  In economics, normal goods are any goods for which demand increases when
income increases and falls when income decreases but price remains constant, i.e. with a positive
income elasticity of demand.[1][2] The term does not necessarily refer to the quality of the good.
   A luxury good means an increase in income causes a bigger %
increase in demand. It means that the YED is greater than one. For example, high Definition
TV¶s would be luxury. When income rises, people spend a higher % of their income on the
luxury good.
  a Giffen good is one which people consume more of as price rises, violating the
law of demand. In normal situations, as the price of a good rises, the substitution effect causes
consumers to purchase less of it and more of substitute goods. In the Giffen good situation,
cheaper close substitutes are not available. Because of the lack of substitutes, the income effect
dominates, leading people to buy more of the good, even as its price rises.
   An inferior good means an increase in income causes a fall in demand. It has a
negative YED. An example, of an inferior good is Tesco value bread. When your income rises
you buy less Tesco value bread and more high quality, organic bread.
  In economics a material good is a good that can be purchased or sold and from
which one receives non-spiritual pleasure. Examples of material goods may include televisions,
houses, cars, and appliances.
a   In economics a non material goods are intangible for they do not posses
any shape or weight and cannot be seen, touched or transferred. Services of all types are non-
material goods such as those of doctors, engineers, actors, lawyers etc.



  Consumable item that is useful to people but scarce in relation to its demand,
so that human effort is required to obtain it. In contrast, free goods (such as air) are naturally in
abundant supply and need no conscious effort to obtain them.
a 


  non economic goods are called free goods because they are free gifts of
nature. They do not have any price and are unlimited in supply Eg: air, water , sunshine etc.

c 
  Broad category that covers mass-market items divided into consumer
durables, consumer non-durables, and soft goods.

 Un-segmented market in which products with mass appeal products (aspirin,
orange juice, soft drinks, paperback romances, etc.) are offered to every customer through mass
retailers or independent stores, and promoted through mass media.

c 
  Mass market heavy goods (such as washing machines, refrigerators,
furniture) intended to last three or more years. Also called durable goods or hard goods.
Consumer non- durables: 1. Mass market expendable goods purchased by consumers for their
daily or frequent consumption. 2. Clothing, towels, and other textile goods (called 'soft goods')
that are not expected to have a useful life of more than three years. See also fast moving
consumer goods (FMCG).

   textiles and goods made from them, and other soft material including flexible
plastic, fur, leather, and vinyl.

c   

  A
 , or simply
 in economics, is saved-
up wealth or a manufactured means of production. Individuals, organizations and governments
use capital goods in the production of other goods or commodities. Capital goods include
factories, machinery, tools, equipment, and various buildings which are used to produce other
products for consumption. Capital goods, then, are products which are not produced for
immediate consumption; rather, they are objects that are used to produce other goods and
services. These types of goods are important economic factors because they are key to
developing a positive return from manufacturing other products and commodities.


  Material or item that is a final-product of a process, but is also used as an
input in the production process of some other good. For example, sugar is consumed directly as
well as in the manufacture of food products. See also intermediate product.

  In economics final goods are goods that are ultimately consumed rather than used
in the production of another good. For example, a car sold to a consumer is a final good; the
components such as tires sold to the car manufacturer are not; they are intermediate goods used
to make the final good.

 In economics, utility is a measure of relative satisfaction. Given this measure, one may
speak meaningfully of increasing or decreasing utility, and thereby explain economic behavior in
terms of attempts to increase one's utility. Utility is often modeled to be affected by consumption
of various goods and services, possession of wealth and spending of leisure time.


u An economic value is the worth of a goods or service as determined by the market. The
economic value of a good or service has puzzled economists since the beginning of the
discipline. First, economists tried to estimate the value of a good to an individual alone, and
extend that definition to goods which can be exchanged. From this analysis came the concepts
i
  and i
 „  

‰
 In ordinary usage, 
 is the quantity of payment or compensation given by one party to
another in return for goods or services. In all modern economies, the overwhelming majority of
prices are quoted in (and the transactions involve) units of some form of currency. Although in
theory, prices could be quoted as quantities of other goods or services this sort of barter
exchange is rarely seen.


!1. Any organization, association or group which provides or maintains a marketplace
where securities, options, futures, or commodities can be traded; or the marketplace itself.
2. To provide goods or services and receive goods or services of approximately equal value in
return; here,  
 barter.
3. The currency markets.

"!

The concept of wealth is of significance in all areas of economics, especially development

economics, yet the meaning of wealth is context-dependent and there is no universally agreed
upon definition. Various definitions and concepts of wealth have been asserted by various
individuals and in different contexts. Defining wealth can be a normative process with various
ethical implications, since often wealth maximization is seen as a goal or is thought to be a
normative principle of its own.




Income is the consumption and savings opportunity gained by an entity within a specified time
frame, which is generally expressed in monetary terms. However, for households and
individuals, "income is the sum of all the wages, salaries, profits, interests payments, rents and
other forms of earnings received... in a given period of time."
Money

  is any object that is generally accepted as payment for goods and services and repayment
of debts in a given country or socio-economic context. The main functions of money are
distinguished as: a medium of exchange; a unit of account; a store of value; and, occasionally, a
standard of deferred payment.

#‰

The  


 
 (#‰) or  



 (#) is the amount of goods
and services produced in a year, in a country. It is the market value of all final goods and
services made within the borders of a country in a year. It is often positively correlated with the
standard of living, alternative measures to GDP for that purpose.
a‰

 a ‰ 
$a‰ is the market value of all goods and services produced in one
year by labor and property supplied by the residents of a country. Unlike Gross Domestic
Product (GDP), which defines production based on the geographical location of production, GNP
allocates production based on ownership.GNP does not distinguish between qualitative
improvements in the state of the technical arts (e.g. increasing computer processing speeds), and
quantitative increases in goods (e.g. number of computers produced), and considers both to be
forms of "economic growth".




Scarcity is the fundamental economic problem of having seemingly unlimited human needs and
wants, in a world of limited resources. It states that society has insufficient productive resources
to fulfill all human wants and needs. Alternatively, scarcity implies that not all of society's goals
can be pursued at the same time; trade-offs are made of one good against others.


 



Microeconomics (from Greek prefix micro- meaning "small" + "economics") is a branch of
economics that studies how the individual parts of the economy, the household and the firms,
make decisions to allocate limited resources, typically in markets where goods or services are
being bought and sold. Microeconomics examines how these decisions and behaviours affect the
supply and demand for goods and services, which determines prices, and how prices, in turn,
determine the quantity supplied and quantity demanded of goods and services. This is a contrast
to macroeconomics, which involves the "sum total of economic activity, dealing with the issues
of growth, inflation, and unemployment. Microeconomics also deals with the effects of national
economic policies (such as changing taxation levels) on the before mentioned aspects of the
economy.


 



Macroeconomics (from Greek prefix "macr(o)-" meaning "large" + "economics") is a branch of
economics that deals with the performance, structure, behavior and decision-making of the entire
economy, be that a national, regional, or the global economy. With microeconomics,
macroeconomics is one of the two most general fields in economics.

Macroeconomists study aggregated indicators such as GDP, unemployment rates, and price
indices to understand how the whole economy functions. Macroeconomists develop models that
explain the relationship between such factors as national income, output, consumption,
unemployment, inflation, savings, investment, international trade and international finance. In
contrast, microeconomics is primarily focused on the actions of individual agents, such as firms
and consumers, and how their behavior determines prices and quantities in specific markets.


 

# An externality is an effect of a purchase or use decision by one set of parties on
others who did not have a choice and whose interests were not taken into account.

Classic example of a negative externality: pollution, generated by some productive enterprise,

and affecting others who had no choice and was probably not taken not account.

Example of a positive externality: Purchase a car of a certain model increases demand and thus
availability for mechanics who know that kind of car, which improves the situation for others
owning that model.

#
 

The amount of a particular economic good or service that a consumer or group of consumers will
want to purchase at a given price. The demand curve is usually downward sloping, since
consumers will want to buy more as price decreases. Demand for a good or service is determined
by many different factors other than price, such as the price of substitute goods and
complementary goods. In extreme cases, demand may be completely unrelated to price, or nearly
infinite at a given price. Along with supply, demand is one of the two key determinants of the
market price.



A fundamental economic concept that describes the total amount of a specific good or service
that is available to consumers. Supply can relate to the amount available at a specific price or the
amount available across a range of prices if displayed on a graph. This relates closely to the
demand for a good or service at a specific price; all else being equal, the supply provided by
producers will rise if the price rises because all firms look to maximize profits.

a 



A variety of
  

   are used in economics to estimate total
economic activity in a country or region, including gross domestic product (#‰), gross national
product (a‰), and net national income (aa). All are especially concerned with counting the
total amount of goods and services produced within some "boundary". The boundary may be
defined geographically, or by citizenship; and limits on the type of activity also form part of the
conceptual boundary; for instance, these measures are for the most part limited to counting goods
and services that are exchanged for money: production not for sale but for barter, for one's own
personal use, or for one's family, is largely left out of these measures, although some attempts are
made to include some of those kinds of production by 
 monetary values to them.

National income is the value of all incomes (wage, interest, rent, profit) of a country in a given
year.
Personal income is all the incomes that an individual receives, whether, it is salary, interest,
money comes from renting the land or property, gifts one receive, medical allowances, pension,
etc.
Disposable income is nothing but personal income minus direct taxes, or the money which one
can consume and save after paying the direct taxes.

Market equilibrium:

Situation where the supply of an item is exactly equal to its demand. Since neither there is
surplus nor shortage in the market, there is no innate tendency for the price of the item to change.



In economics, elasticity is the ratio of the percent change in one variable to the percent change in
another variable. It is a tool for measuring the responsiveness of a function to changes in
parameters in a unit-less way. Frequently used elasticity¶s include price elasticity of demand,
price elasticity of supply, income elasticity of demand, elasticity of substitution between factors
of production and elasticity of intertemporal substitution.

% 

 & 

!a lack of response in a supply or demand curve by which
supply or demand does not change in quantity as a result of a change in price

‰ 

Term point elasticity Definition: The relatively responsiveness of a change in one variable (call it
B) to an infinitesimally small change in another variable (call it A). The notion of point elasticity
typically comes into play when discussing the elasticity at a specific point on a curve.< P>Point
elasticity can be calculated in a number of different ways. Sophisticated economists, using
sophisticated mathematical techniques (better known as calculus) can calculate point elasticity
by taking derivatives of equations. Derivatives are fancy calculus talk for infinitesimally small
changes.

'



Arc elasticity is the elasticity of one variable with respect to another between two given points.

The  arc elasticity of  is defined as:

Where the percentage change is calculated relative to the midpoint

 
  
  


  responsiveness of output to changes in price; computed as the percentage
change in the quantity supplied divided by the percentage change in the price. Supply is said to
be elastic (inelastic) if the elasticity exceeds (is less than) 1. The more elastic supply is, the more
will a change in price increase production.


  
  responsiveness of buyers to changes in price, defined as the percentage
change in the quantity demanded divided by the percentage change in price. Demand for luxury
items may slow dramatically if prices are raised, because these purchases are not essential and
can be postponed.

(

In economics, economic equilibrium is a state of the world where economic forces are balanced
and in the absence of external influences the (equilibrium) values of economic variables will not
change. It is the point at which quantity demanded and quantity supplied is equal. 
equilibrium, for example, refers to a condition where a market price is established through
competition such that the amount of goods or services sought by buyers is equal to the amount of
goods or services produced by sellers. This price is often called the (

 or market
clearing price and will tend not to change unless demand or supply change.

' 
 

Accumulation, examination, and manipulation of cost data for comparisons and projections. A
technique designed to determine the feasibility of a project or plan by quantifying its costs and
benefits.

 

Interest that could be earned if the amount invested in a business or security was instead invested
in government bonds or in time deposit.

Money cost is basically the interest rate a company will pay for loans. When the issue bonds,
there will be either a coupon (payment) or maturation value. Since the company will pay back
more than it raise there is a cost associated with raising that financing. Money cost goes one step
further since inflation/deflation is also factored into money cost.

)

The cost of producing a good or service, including the cost of all resources used and the cost of
not employing those resources in alternative uses.



 

pportunity cost is the cost related to the next-best choice available to someone who has picked
among several mutually exclusive choices. It is a key concept in economics. It has been
described as expressing "the basic relationship between scarcity and choice." The notion of
opportunity cost plays a crucial part in ensuring that scarce resources are used efficiently. Thus,
opportunity costs are not restricted to monetary or financial costs: the real cost of output forgone,
lost time, pleasure or any other benefit that provides utility should also be considered opportunity
costs.





Incremental cost is the cost associated with increasing production by one unit. Because some
costs are fixed and other variable, the incremental cost will not be the same as the overall
average cost per unit. The cost figure can be used for a variety of economic calculations, most
notably the point at which increasing production ceases to be efficient.



In economics and finance,


 is the change in total cost that arises when the quantity
produced changes by one unit. That is, it is the cost of producing one more unit of a good.[1]
Mathematically, the marginal cost (MC) function is expressed as the first (order) derivative of
the total cost (TC) function with respect to quantity (Q). Note that the marginal cost will change
with volume, as a non-linear and non-proportional cost function includes

y variable terms dependent to volume,

y constant terms independent to volume and occurring with the respective lot size,
y ump fix cost increase or decrease dependent to steps of volume increase.



In economics and business decision-making, 
 are retrospective (past) costs that have
already been incurred and cannot be recovered. Sunk costs are sometimes contrasted with
 „
i „
, which are future costs that may be incurred or changed if an action is taken.
Both retrospective and prospective costs may be either fixed (that is, they are not dependent on
the volume of economic activity, however measured) or variable (dependent on volume).

‰&

Producer's or supplier's cost of providing goods or services. It includes internal costs incurred for
inputs, labor, rent, and depreciation but (unlike social cost) excludes external costs incurred as
environmental damage (unless the producer or supplier is liable to pay for them).




An external cost is a cost that a producer or a consumer imposes on another producer or

consumer, outside of any market transaction between them. "External" means "outside." Here,
"outside" means outside of any buying and selling among people or firms. If there is an external
cost on you, you are giving something up without receiving any agreed-upon payment.

Pollution of air or water is the prime example of an external cost. If you drive a car, you are
putting the products of combustion into the atmosphere. These added gases can make the air
poisonous for other people to breath. They contribute to climate change. Those are external
costs of driving cars. Coal- and oil-fired power plants impose similar external costs on all of us.





Social cost, in economics, is generally defined in opposition to "private cost". In economics,

theorists model individual decision-making as measurement of costs and benefits. Rational
choice theory often assumes that individuals consider only the costs they themselves bear when
making decisions, not the costs that may be borne by others.

With pure private goods, the costs carried by the individuals involved are the only economically
meaningful costs. The choice to purchase a glass of lemonade at a lemonade stand has little
consequence for anyone other than the seller or the buyer. The costs involved in this economic
activity are the costs of the lemons and the sugar and the water that are ingredients to the
lemonade, the opportunity cost of the labour to combine them into lemonade, as well as any
transaction costs, such as walking to the stand.

 


In economics,  
 are business expenses that are not dependent on the level of goods or
services produced by the business they tend to be time-related, such as salaries or rents being
paid per month. This is in contrast to variable costs, which are volume-related (and are paid per
quantity produced). In management accounting, fixed costs are defined as expenses that do not
change as a function of the activity of a business, within the relevant period. For example, a
retailer must pay rent and utility bills irrespective of sales.

u

Variable costs are expenses that change in proportion to the activity of a business. Variable cost
is the sum of marginal costs over all units produced. It can also be considered normal costs.
Fixed costs and variable costs make up the two components of total cost. #
c , however,
are costs that can easily be associated with a particular cost object.

'& 
$'*c 
Average total cost is the sum of all the production costs divided by the number of units produced.

 +& 

A business metric that represents the average cost per unit of output over the long run, where all
inputs are considered to be variable.

Long-term unit costs are almost always less than short-term unit costs because in a long-term
time frame, companies have the flexibility to change big components of their operations, such as
factories, to achieve optimal efficiency. A goal of both company management and investors is to
determine the lower bounds of LRATC.

)&
In business, & is income that a company receives from its normal business activities,
usually from the sale of goods and services to customers. In many countries, such as the United
Kingdom, revenue is referred to as  &. Some companies receive revenue from interest,
dividends or royalties paid to them by other companies
* )&$*) 

Total revenue is the total money received from the sale of any given quantity of output.

The total revenue is calculated as the selling price of the firm's product times the quantity sold,
i.e. Total revenue = price × quantity;

TR (Q) = P (Q) × Q

&$) 

More formally, marginal revenue is equal to the change in total revenue over the change in
quantity when the change in quantity is equal to one unit. This can also be represented as a
derivative when the units of output are arbitrarily small. (Total revenue) = (Price that can be
charged consistent with selling a given quantity) times (Quantity) or . Thus,
by the product rule:

For a firm facing perfectly competitive markets, price does not change with quantity sold (

), so marginal revenue is equal to price. For a monopoly, the price received will

decline with quantity sold ( ), so marginal revenue is less than price. This means that
the profit-maximizing quantity, for which marginal revenue is equal to marginal cost (MC) will
be lower for a monopoly than for a competitive firm, while the profit-maximizing price will be
higher. When demand is elastic, marginal revenue is positive, and when demand is inelastic,
marginal revenue is negative. When the price elasticity of demand is equal to 1, marginal
revenue is equal to zero.


'&&$') 
Average revenue is the revenue generated per unit of output sold. It plays a role in the
determination of a firm's profit. Per unit profit is average revenue minus average (total) cost. A
firm generally seeks to produce the quantity of output that maximizes profit.

   

In economics, a
   exists when a specific individual or an enterprise has sufficient
control over a particular product or service to determine significantly the terms on which other
individuals shall have access to it.

   


  is a form of imperfect competition where many competing producers
sell products that are differentiated from one another (that is, the products are substitutes, but,
with differences such as branding, are not exactly alike). In monopolistic competition firms can
behave like monopolies in the short-run, including using market power to generate profit. In the
long-run, other firms enter the market and the benefits of differentiation decrease with
competition; the market becomes more like perfect competition where firms cannot gain
economic profit. Unlike perfect competition, the firm maintains spare capacity. Models of
monopolistic competition are often used to model industries.

  
An    is a market form in which a market or industry is dominated by a small number of
sellers (oligopolists). Because there are few sellers, each oligopolist is likely to be aware of the
actions of the others. The decisions of one firm influence, and are influenced by, the decisions of
other firms. Strategic planning by oligopolists needs to take into account the likely responses of
the other market participants.

#  
A true    is a specific type of oligopoly where only two producers exist in one market. In
reality, this definition is generally used where only two firms have dominant control over a
market. In the field of industrial organization, it is the most commonly studied form of oligopoly
due to its simplicity.

‰ 
 


In economics, the
+ + 
 !  & is the theory that the price of an object or
condition is determined by the sum of the cost of the resources that went into making it. The cost
can compose any of the factors of production (including labour, capital, or land) and taxation.

The theory makes the most sense under assumptions of constant returns to scale and the
existence of just one non-produced factor of production. These are the assumptions of the so-
called non-substitution theorem. Under these assumptions, the long run price of a commodity is
equal to the sum of the cost of the inputs into that commodity, including interest charges.




The cost used to make a sale. Basically to compare the RI of an operation or transaction(s).
This cost can be sales employee wages, building lease, postage, sales calls, etc. The total cost of
marketing, advertising, and selling a product.

 
In economics,   is a rise in the general level of prices of goods and services in an
economy over a period of time. When the general price level rises, each unit of currency buys
fewer goods and services. Consequently, inflation also reflects erosion in the purchasing power
of money ± a loss of real value in the internal medium of exchange and unit of account in the
economy.

c
 ,
In economics, the terms

 , 

 or

 , refer to a simple economic
model which describes the reciprocal circulation of income between producers and consumers. In
the circular flow model, the inter-dependent entities of producer and consumer are referred to as
"firms" and "households" respectively and provide each other with factors in order to facilitate
the flow of income.
$ 
 

The    () is the intergovernmental organization that oversees
the global financial system by following the macroeconomic policies of its member countries, in
particular those with an impact on exchange rate and the balance of payments. It is an
organization formed with a stated objective of stabilizing international exchange rates and
facilitating development through the enforcement of liberalizing economic policies on other
countries as a condition for loans, restructuring or aid. It also offers loans with varying levels of
concessionality, mainly to poorer countries. Its headquarters are in Washington, D.C., United
States. The IMF's relatively high influence in world affairs and development has drawn heavy
criticism from some sources.

* 
A number of industrial countries, a few of a larger developing countries, the private sector and
non-governmental organizations maintain trust funds, with the world bank that can be used to
supplement bank resources for specific agreed-on initiatives.
&
 
Investment loans provide finance for goods, works, and services in support of economic and
social development projects in a broad range of sectors. The nature of the bank¶s investment
leading has evolved over time. riginally focused on hardware, engineering services, and bricks
and mortar, investment lending has come too focused on hardware, engineering services, and the
public policy infrastructure needed to facilitate private sector activity as the bank¶s priorities
have changed.