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From Citizendium, the Citizens' Compendium

Index

Index to topics in economics articles

Definitions

• Consumer surplus [r]: The excess of what a consumer is willing to pay for a product over what he has to pay for it. [e]

• Cross elasticity of demand [r]: The percentage change in the quantity demanded of one good as a result of a unit percentage change in the price of another good. [e]

• Diminishing returns [r]: The tendency for the output resulting from the employment of an addition unit of a factor of production to fall as the amount of that unit is increased when all other factors of production are held constant (cf economies of scale). [e]

• Economies of scale [r]: The factors that cause the cost of production of a product to fall as output of the product is increased. [e]

• Elasticity [r]: In physics, engineering and economics, the proportional change of a dependent variable with respect to the change of a related independent variable. [e]

• Elasticity of demand [r]: The percentage change in the amount of a product that is demanded that is caused by a unit percentage change in its price. [e]

• Elasticity of substitution [r]: The percentage change in the ratio of the amounts of two products that is demanded that is caused by a unit percentage change in the ratio of their unit prices. [e]

• Externality [r]: A cost of production that is not borne by the producer (see microeconomics: production). [e]

• Giffen good [r]: An "inferior product" for which the amount demanded falls when its price falls (because the increase in income resulting from the price reduction prompts the consumer to switch expenditure to a more expensive product). [e]

• Income effect [r]: The tendency of the demand for a product to change in response to a change in its price because the price change has the effect of changing the consumer's income. [e]

• Income elasticity of demand [r]: The percentage change in the demand for a product that is caused by a unit percentage change in consumers' incomes. [e]

• Incomplete contract [r]: A contract that does not fully specify what each party to it must do under every conceivable circumstance. [e]

• Marginal utility [r]: The increase in the satisfaction experienced by a consumer caused by a unit increase in his possession of a product. [e]

• Nash equilibrium [r]: A situation in game theory in which no player can improve his position, given the responses of the other players. [e]

• Market [r]: In economics, the conjunction of potential buyers and potential sellers of a product, in any context in which exchanges can be arranged, using money or by barter. [e]

• Market power [r]: The ability of a supplier to exercise a degree of choice concerning the pricing of a product by restricting its supply. (see Competition policy) [e]
• Price elasticity of demand: see elasticity of demand

• Producer surplus [r]: The excess of the revenue that a producer gets from the sale of a product over the minimum that he would be willing to accept for it. [e]

• Substitution effect [r]: The tendency of consumers to switch spending to or from a product in response to a change in its price relative to that of a substitute. [e]

• Veblen good [r]: A product, the demand for which increases when its price increases because consumers obtain more satisfaction from more expensive products. [e]

• Walras' law [r]: The sum of the excess demands in all of the markets in a closed economy is equal to zero. [e]

• Wieser's law [r]: The costs of production under competitive conditions are a reflection of the value of the alternatives which are displaced. [e]