Glossary Terms:

Utility

Glossary terms from:
http://www.econedlink.org/e925


Benefit

Monetary or non-monetary gain received because of an action taken or a decision made.

Choice

Decision made or course of action taken when faced with a set of alternatives.

Consumers

People who use goods and services to satisfy their personal needs and not for resale or in the production of other goods and services.

Consumption

Spending by households on goods and services. The process of buying and using goods and services.

Costs

An amount that must be paid or spent to buy or obtain something. The effort, loss or sacrifice necessary to achieve or obtain something.

Decision

A conclusion reached after considering alternatives and their results.

Decision Making

Reaching a conclusion after considering alternatives and their results.

Demand

The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.

Diminishing Marginal Utility

A widely observed relationship in which the additional satisfaction (marginal utility) associated with consuming additional units of the same product in a given amount of time eventually declines.

Economics

The study of how people, firms and societies choose to allocate scarce resources with alternative uses.

Fixed Income

Income that stays the same from week to week or month to month. Usually refers to income from pensions or bonds.

Goods

Tangible objects that satisfy economic wants.

Law of Demand

As the price of a good or service rises (or falls), the quantity of that good or service that people are willing and able to buy during a certain period of time falls (or rises).

Law of Diminishing Marginal Utility

A widely observed relationship in which the additional satisfaction (marginal utility) associated with consuming additional units of the same product in a given amount of time eventually declines.

Marginal Analysis

A decision-making tool for comparing the additional or marginal benefits of a course of action to the additional or marginal costs.

Marginal Cost

The increase in a producer's total cost when it increases its output by one unit.

Marginal Utility

The extra value or satisfaction that a consumer obtains from consuming one additional unit of output.

Money

Anything that is generally accepted as final payment for goods and services; serves as a medium of exchange, a store of value and a standard of value. Characteristics of money are portability, stability in value, uniformity, durability and acceptance.

Price

The amount of money that people pay when they buy a good or service; the amount they receive when they sell a good or service.

Quantity Demanded

The amount of a good or service people will buy at a given price in a given period of time.

Revenue

The money a business receives from customers who buy its goods and services. Not to be confused with profit.

Spend

Use money now to buy goods and services.

Utility

An abstract measure of the satisfaction consumers derive from consuming goods and services.

Work

Effort applied to achieve a purpose or result, often for pay; skills and knowledge put to use to get something done; employment at a job or in a position; occupation, profession, business, trade, craft, etc.