This is the intangible benefit that consumers derive from the fact that the price some of them are willing and able to pay (represented by the demand curve) is higher that the price that they actually have to pay.
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Derived demand
This is a term often used in the context of the labour market. The demand for labour is a derived demand because it is derived from the demand for the good that the labour is producing. If there is a huge drop in demand for cars, for example, then th
2 of 5
Income effect
When a worker is already earning a relatively high wage and there is a rise in the real wage rate, he may be tempted to take a couple of hours off each week. Once a worker is earning quite a lot of money, there comes a point where he wants to enjoy t
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Producer surplus
This is effectively profit. If a producer has a surplus over and above his costs, then he is making profit. Diagrammatically, it is the area above the supply curve, below the price and to the right of the y-axis.
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Aggregate supply
This is the aggregate of all the supply in the economy. Effectively, it is the sum of all the industry supply curves in an economy. An aggregate supply curve shows the amount supplied (or the level of real output) in the whole economy at any given pr
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Other cards in this set
Card 2
Front
This is a term often used in the context of the labour market. The demand for labour is a derived demand because it is derived from the demand for the good that the labour is producing. If there is a huge drop in demand for cars, for example, then th
Back
Derived demand
Card 3
Front
When a worker is already earning a relatively high wage and there is a rise in the real wage rate, he may be tempted to take a couple of hours off each week. Once a worker is earning quite a lot of money, there comes a point where he wants to enjoy t
Back
Card 4
Front
This is effectively profit. If a producer has a surplus over and above his costs, then he is making profit. Diagrammatically, it is the area above the supply curve, below the price and to the right of the y-axis.
Back
Card 5
Front
This is the aggregate of all the supply in the economy. Effectively, it is the sum of all the industry supply curves in an economy. An aggregate supply curve shows the amount supplied (or the level of real output) in the whole economy at any given pr
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