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ECON 101 (172)

econ 101 term

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ECON 101
Robert Gateman

ECON 101 Terms Chpt. 6-8 Utility The satisfaction or well-being that a consumer receives from consuming some good or service Total Utility The total satisfaction resulting from the consumption of a given commodity by a consumer Marginal Utility The additional satisfaction obtained by a consumer from consuming one additional unit of a commodity Real Income Income expressed in terms of the purchasing power of money income, that is, the quantity of goods and services that can be purchased with the money income Substitution Effect The change in the quantity of a good demanded resulting from a change in its relative price (holding real income constant) Income Effect The change in the quantity of a good demanded resulting from a change in real income (holding relative prices constant) Giffen good An inferior good for which the income effect outweighs the substitution effect so that the demand curve is positively sloped Consumer surplus The difference between the total value that consumers place on all units consumed of a commodity and the payment that they actually make to purchase that amount of the commodity Single proprietorship A firm which has one owner who is personally responsible for the firm’s actions and debts Ordinary partnership A firm which has two or more joint owners, each of whom is personally responsible for the firm’s actions and debts Limited partnership A firm which has two classes of owners: general partners, who take part in managing the firm and are personally liable for the firm’s actions and debts, and limited partners, who take no part in the management of the firm and risk only the money that they have invested Corporation A firm which has a legal existence separate from that of the owners State-owned enterprise A firm that is owned by the government (in Canada, these are called Crown corporations) Non-profit organizations Firms that provide goods and services with the objective of just covering their costs Multinational enterprises (MNEs) Firms that have operations in more than one country Dividends Profits paid out to shareholders of a corporation (aka distributed profits) Bond A debt instrument carrying a specific amount and schedule of interest payments and (usually) a date for redemption of its face value Intermediate products All outputs that are used as inputs by other producers in a further stage of production Production function A functional relation showing the maximum output that can be produced by each and every combination of inputs Economic profits (or losses – if negative) The difference between the revenues received from the sale of the output and the opportunity cost of the inputs used to make the output Short run A period of time in which the quantity of some inputs cannot be increased beyond the fixed amount that is available Fixed factor An input whose quantity cannot be changed in the short run Variable factor An input whose quantity can be changed over the time period under consideration Long run A period of time in which all inputs may be varied, but the existing technology o
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