Unit one notes (continued) pg. 3

• Fixed cost- cost that does NOT change no matter how much of a good is being produced.
• examples include: salary, parents mortgage. 
• Variable cost- costs that rises or falls depending upon how much is produced.
• examples include: electricity
• Marginal cost- cost of producing one more unit of a good.
• examples include: senior shirt example story ..
• Revenue = receving
• Cost = what you give
• Price ceiling- (" Buyers") legal maximum price meant to help buyers.
• examples include: rent center
• 4 consequences are set to low:
1.  Lowered prices for some consumers
2. Shortages
3. Long lines for some buyers
4. Illegal sells above the equilibrium price
• Price floor-("Sellers") legal minimum price meant to help sellers keep price from falling. 
• examples include: minimum wage
• 4 consequences: 
1. higher product prices
2. suplus
3. higher taxes
4. waste
• Business cycle- fluctuation in economic activity that an economy experience over a period of time 
• Expansion- it's a period of economic upturn when output and input are rising.
• Peak- highest point; business activity has reached it's temporary max. It's near or at full employment.
• Contraction (recession)- Period of decline in total output, input, and eyployment.
• Trough- Lowest point; point in which economy turns from recession to depression.