Economics

an area of social studies which studies and measures how people make choices to satisfy unlimited
wants and needs with the limited resources available to them. There are three levels of economics,
namely: macroeconomics, microeconomics, and home economics. 

 The science of economics combines and uses many other social studies.

Feel free to jump on any part you want:
1. Microeconomics: Supply & Demand
2. Words about money
3. Phrases for when you are making money
4. Phrases for when you don’t have money
5. Phrases for when you are shopping

One of the most difficult things about learning a new language, especially once you’ve gotten the basics,
is keeping up with so many random phrases, idioms, and expressions. This is hard not only because very
few seem to be very logical, but also because they’re constantly changing.

Expressions die out, and new ones fall into common usage all the time. When you learn idioms straight
from the textbook, you might find it frustrating to find out that some of the sayings you worked so hard
to memorize are only really used by people in their ‘50s and up.

When it comes to money, however, it doesn’t hurt to throw a few expressions into your toolbox, just
because there are so many out there. Money really does make the world go ‘round, and language is a
great reflection of this.

For example, even the word “money” has many synonyms, both formal and colloquial, each with their
own slight nuances. So, here is a compiled list of several English terms, phrases, and idioms that you
might find helpful in the world of money.

I tried to include mostly expressions that I find common as an English speaker. Usually, the first thing
we learn in Economics 101 is supply and demand. So to help you I have created a short list of the most
important terms used in basic economics with explanations and example sentences.

MICROECONOMICS VOCABULARY TERMS 101

Everything about Supply & Demand

Microeconomics
a study focusing on individual consumers and organizations, their needs and wants, and the choices
they make in regards to fulfilling these needs and wants with the scarce resources available to them.

 How we choose to spend our time and money are microeconomic choices.

Resources 
a resource is anything of value to us that we can use in the production (to make) of a good or service.
Examples of resources include natural resources like water, wheat, and rice. Time, human labor, money,
and machinery are also resources.

 Most people do not have the resources to live like Bill Gates.

 Scarce (adj.) / Scarcity (noun)
in regular conversation, scarcity means not having enough of something. In economics scarcity, or
having “scarce resources”, means to have a limited amount of the resource. Even the richest man in
the world’s resources are limited to a certain degree.

 Economics is a study of how people satisfy their unlimited desires with scarce

resources.

Goods
products, materials and any other physical things which can be bought, traded, or sold to
individual consumers, or organizations. Examples: food items, phones, computers, furniture,
stationary, clothes, and toys.

 Department stores like Walmart or Target have thousands of goods for consumers.   

Services
actions or work activities performed by one person, or organization that is provided for payment from a
customer for the service. Examples include: getting a haircut, an accountant doing taxes, English lessons
with a tutor.

 MyEnglishTeacher.eu provides various services depending on the student’s needs.

 When you spend lots of money at the hairdressers, you expect excellent service.

Consumers
consume means to use up, drink, or eat. People who personally buy or use a product or service are
called consumers.

 The first step to marketing is knowing who your product’s end consumer is.

Demand
in regular conversation, demand means to ask strongly for something, as if it is your right to have it. In
economics, demand refers to the quantity of a good or service consumers would like to buy at a certain
price, during a particular period.

 Demand for headphones has gone up with the popularity of the iPhone and other
smartphones.

Demand Curve
a graph showing the relationship between the quantity of a goods or services that consumers want,
and its price per unit. The horizontal axis illustrates the amount consumers will buy, and the vertical
axis shows the different possible prices of the good or service.

 We can see from the product’s Demand Curve that we will sell more units if we lower
the price.
 Looking at the demand curve you can easily tell the price of a beer.
 Law of Demand
The concept that people are normally willing to buy less of a product if the price is high and more of a
product if the price is low. T

he fact that when a good or service’s price increases, it causes a decrease in the quantity demanded by consumers. It works the
other way too. When the price of a good or service falls, the quantity demanded increases. 

 If the price of milk drops, we can expect – according to the Law of Demand -, that milk
sales will increase.

The elasticity of demand

the amount a market’s demand for a product changes in relation to changes in its price. Some products
are more sensitive to price movements, where sales change drastically after any change in price.  These
are said to have high elasticity.

 Wine has a high elasticity of demand. When wine prices rise, the demand for wine

drops significantly.

Determinants of Demand / Supply

factors other than money which create changes in a good’s demand or supply. Examples: Changes in
market size, a target group’s income levels, changes in the market’s tastes.

 There are many determinants of demand to keep in mind when marketing a good or

service. 
Supply
the number of goods and services that producers want to, and are capable of, providing
to consumers at different prices, during a particular period.

 The supply of rice has seen an increase in recent years, as farmers take advantage of
the rise in rice prices.

Producers
an individual or organization that makes or provides goods and services to fulfill consumers’ needs and
desires. Examples: Nike produces shoes, Apple produces consumer electronics.

 The producers of the widely popular Angry Birds app have produced a range of toys
based on the app’s characters.

The supply curve

a graph showing the relationship between the quantity of a good or service desired by consumers and
its price. The horizontal axis will most commonly show a quantity, whereas the vertical axis will have
different price points.

 As we can see from the supply curve below, the producers will supply 100 units of

their product if it is priced at $100.
 Law of supply
the fact that producers will provide higher quantities of a good or service at higher prices than lower
prices. This is because they are often able to make more money when their products or services can
be priced at higher prices.

 We know according to the Law of Supply that oil companies will produce more barrels
of oil when prices are high than when they are low.

The elasticity of supply

how much any change in the price of a good or service affects the amounts producers supply. The
higher the elasticity, the greater the change in supply per dollar increase or decrease in price.

 Diamonds have a high elasticity of supply. When the market price rises, diamond
mining increases, to take advantage of the higher possible profits gained.

Utility: the amount of satisfaction one gets from a good or service

 I love the utility of the new soap.

Substitute: a competing product that consumers can use in place of another

 Yes, you can always use butter as a substitute for margarine.

Excise tax: a tax on the production or sale of a good

 We would need a revolution to get the government to reduce the excise tax

Regulation: government intervention in a market that affect the production of a good

 The new regulation is seriously discouraging importation of goods in Italy

Equilibrium: when supply and demand are equal

 This is the time to stock up the store, the market is at Equilibrium.

Assets: resources and capital that positively impact your business model

 Buying this building is a big asset to your business.

Liabilities: resources and capital that negatively impact your business model
 The delivery van is becoming a liability to us

Input prices: the price tagged on sales

 Fluctuations of input prices impact producers ability to supply goods and services