Econ Slang

Business has many fields, and within each field, there are specific terms that are used. In business, there are three main languages, accounting, finance, and economics. Only economics will be discussed but for more information on accounting and finance, you can read about them at Corporate Finance Institute.

The language of economics focuses on the external side of business. That means government, markets, and consumers. Having knowledge of the language of economics is a crucial component to a business. A business's success comes from understanding the external effects on the firm. There are many terms used in economics, but the main ones are:

• Consumer Surplus- On a graph, consumer surplus is the space between the demand curve and the market price
• Indifference Curves- Combinations of quantities that the consumer sees as equal value.
• Price Elasticity- The change in quantity demanded based on price change.
• Substitutes- Competing goods that can be interchanged 
• Supply and demand- Relationship between how much of a good a firm should produce, the amount of a good consumers would purchase, and the price at which they would purchase. Ideally, firms sell products at a price where the supply and demand lines intersect.

Credit to BYU Idaho

An economist must know more than these main ideas, but for now, the big picture concepts will do. Because I am taking microeconomics currently, these terms have been ground into my head. It is important to understand these terms because economics is all about building on previous concepts. Old ideas are merely stepping stones to complex ones, and nothing becomes obsolete.  
Written by Colin Bergman

The Language of Business - Do you Speak It?