This document defines and provides examples of various economics terms: Macroeconomics studies the overall economy and looks at metrics like GDP, unemployment, and inflation. Microeconomics examines individuals and firms making decisions about allocating scarce resources. Command economies have the government determine production, prices, and investments rather than free markets. Comparative advantage gives companies the ability to sell goods at lower prices than competitors. Supply and demand, elasticity, excess supply and demand, and shifts and curves are also defined. The law of diminishing returns and concepts like inflation, incentives, and market structures of monopoly and oligopoly are additionally summarized.

1. The
economics
terms
DEFINITION AND REAL LIFE EXAMPLES:
MACROECONOMICS : is the branch
of economics that studies the behavior and
performance of an economy as a whole. It
focuses on the aggregate changes in
the economy such as unemployment, growth
rate, gross domestic product and inflation.
COMPITITIVE MARKET : is one where there are
numerous producers that compete with one
another in hopes to provide goods and
services we, as consumers, want and need.
In other words, not one single producer can
dictate the
MICROECONOMICS : is a branch of economics
that studies the behavior of individuals
and firms in making decisions regarding
the allocation of scarce resources and the
interactions among these individuals and
firms.

2. COMMAND ECONOMY : is a system where the government,
rather than the free market, determines what goods should
be produced, how much should be produced, and the price
at which the goods are offered for sale. It also determines
investments and incomes.
ABSOLUTE ADVANTAGE : is when a producer can
produce a good or service in greater quantity for
the same cost, or the same quantity at a lower
cost, than other.
OPPORTUNITY COST : the loss of other
alternatives when one alternative is
chosen.
COMPARATIVE ADVANTAGE : is an economy's ability to
produce a particular good or service at a lower
opportunity cost than its trading partners. It gives
a company the ability to sell goods and services at
a lower price than its competitors and realize
stronger sales margins.

3. DEMAND : is an economic principle referring to a
consumer's desire to purchase goods and services and
willingness to pay a price for a specific good or service.
Holding all other factors constant, an increase in the price
of a good or service will decrease the
quantity demanded, and vice versa.
SUPPLY : is a fundamental economic concept that
describes the total amount of a specific good or
service that is available to consumers. Supply can
relate to the amount available at a specific price or
the amount available across a range of prices if
displayed on a graph.
EXCESS SUPPLY : In economics, an excess supply or
economic surplus is a situation in which the quantity
of a good or service supplied is more than the
quantity demanded, and the price is above the
equilibrium level determined by supply and demand.

4. EXCESS DEMAND : is demand minus supply.
SHIFT : a movement occurs when a change in quantity
supplied is caused only by a change in price, and vice
versa. Meanwhile, a shift in a demand or supply curve
occurs when a good's quantity demanded or supplied
changes even though price remains the same.
ELASTIC DEMAND : is a fundamental economic concept
that describes the total amount of a specific good or
service that is available to consumers. Supply can
relate to the amount available at a specific price or
the amount available across a range of prices if
displayed on a graph.
ELASTIC SUPPLY : Price elasticity of supply measures the
responsiveness to the supply of a good or service after
a change in its market price. According to
basic economic theory, the supply of a good will
increase when its price rises. Elastic means the
product is considered sensitive to price changes.

5. INELASTIC DEMAND : An example of an elastic good is
movie tickets, which are viewed as entertainment and
not a necessity. The price elasticity of supply is
determined by: Number of producers: ease of entry
into the market. Spare capacity: it is easy to increase
production if there is a shift in demand.
INELASTIC SUPPLY : Inelastic goods are often described as
necessities. A shift in price does not drastically impact
consumer demand or the overall supply of the good
because it is not something people are able or willing
to go without.
LAW OF DIMINISHING RETURNS : Diminishing returns, also
called law of diminishing returns or principle
of diminishing marginal productivity,
economic law stating that if one input in the
production of a commodity is increased while all other
inputs are held fixed, a point will eventually be
reached at which additions of the input yield.

6. INFLATION : is the decline of purchasing power of a
given currency over time. A quantitative estimate of
the rate at which the decline in purchasing power
occurs can be reflected in the increase of an average
price level of a basket of selected goods and
services in an economy over some period of time.
INCENTIVE : In the most general terms, an incentive is
anything that motivates a person to do something.
When we're talking about economics,
the definition becomes a bit narrower: Economic
incentives are financial motivations for people to take
certain actions.
MONOPOLY : A market structure in which only one seller
sells a product for which there are no close substitutes.
Cartel. A formal organizations of sellers or producers
that agree to act together to set prices and limit output.
Price maker.

7. OLIGOPOLY : An oligopoly is a market characterized by a
small number of firms who realize they are
interdependent in their pricing and output policies.
The number of firms is small enough to give each firm
some market power.
PRESENTEDBY :
YEDAPALLY . SRUJANA REDDY
18031AA079
B - SECTION
6Th SEMESTER
CSIIT SCHOOL OF PLANNING AND ARCHITECTURE
HYDERABAD