Economics Class XII: Microeconomics and Trade

The act of exchanging goods, services, or resources between individuals, groups, or countries to fulfill their needs or desires.

Trade where both parties involved gain something they need or value. This creates a win-win situation for everyone.

Individuals or groups focus on producing goods or services where they're best at, then they trade these for other things they need.

Involves exchanging goods and services directly without using money as a medium of exchange.

The process of buying and selling goods and services within a single country.

Trading goods and services between different countries, including both imports and exports.

Goods brought into a country from another country.

Goods sold to another country.

The ratio of the percentage change in the quantity supplied of a good to the percentage change in its price.

The supply of a good is relatively insensitive to price changes. When price changes, the quantity supplied changes by a smaller proportion than the price change.

The supply of a good is sensitive to price changes. When price changes, the quantity supplied changes by a larger proportion than the price change.

The proportionate change in quantity supplied is equal to the proportionate change in price. This means that the supply is equally sensitive to price changes.

The availability of resources, such as labor, raw materials, and machinery, to produce more goods or services.

The costs associated with producing more goods or services. If production costs increase significantly as output rises, supply is likely to be less elastic.

The time frame for which a supply decision is being made. In the short run, supply tends to be less elastic as producers may face limited options to increase production. In the long run, supply can be more elastic as producers have more time to adjust to price changes.

If a product is easy to produce and materials are readily available, supply is likely to be more elastic, meaning producers are more likely to increase output in response to price changes.

The willingness to take risks associated with increasing production. If producers are comfortable taking on increased risk, they are more likely to increase production in response to price changes, making supply more elastic.

Refers to the availability of resources, facilities, and infrastructure needed to increase production. If these factors are readily available, it's easier for producers to increase output in response to price changes, leading to a more elastic supply.

It is the quantity that producers are willing and able to sell at a given price during a specific time period and reflects the relationship between the price of a product or service and the quantity that producers are willing to offer for sale.

The degree to which the quantity supplied of a good changes in response to a change in its price.

The point at which the supply of a product or service changes at the same rate as its price.

The situation when the supply of a product or service is highly responsive to changes in price. Small changes in price lead to large changes in the quantity supplied.

The situation when the supply of a product or service is less responsive to changes in price. Large changes in price lead to small changes in the quantity supplied.

The time period during which producers can adjust supply in response to changes in price. In the short run, production capacity is fixed, leading to a less elastic supply. In the long run, producers have more time to make adjustments, leading to a more elastic supply.

The ability to increase production or supply. If production capacity is limited, supply is less elastic.

It refers to the ease with which resources, such as labor or raw materials, can be obtained and used to increase production. If resources are easily available, supply is likely to be more elastic, meaning producers can readily respond to changes in price.

Refers to the costs associated with producing additional goods or services. If production costs increase significantly when output rises, supply is likely to be less elastic.