If the quantity demanded of a product increases with increase in consumer income, the product is a normal good and if the quantity demanded decreases with increase in income, it is an inferior good. A normal good has positive and an inferior good has negative elasticity of demand.
Elasticity of demand are measures of responsiveness of quantity demanded of a product to different determinants of demand. There are three main types of demand elasticity: the price elasticity of demand, income elasticity of demand and cross elasticity of demand.
A product or service has elastic demand when its price elasticity of demand is greater than 1, unit-elastic when price elasticity is 1 and inelastic when the price elasticity is less than 1.
A supply function is a mathematical expression of the relationship between quantity demanded of a product or service, its price and other associated factors such as input costs, prices of related goods, etc.
A demand function is a mathematical equation which expresses the demand of a product or service as a function of the its price and other factors such as the prices of the substitutes and complementary goods, income, etc.
Market clearing price is the price at which the quantity demanded of a product or service equals quantity supplied and no surplus or shortage exists in the market. It is the price that corresponds to the point of intersection of the demand curve and the supply curve.
Quantity supplied is the quantity of a product which producers are willing to supply at a given price while change in supply refers to the overall shift in supply schedule due to technological changes, input prices, government regulations, etc.
In economics, demand refers to the demand schedule i.e. the demand curve while the quantity demanded is a point on a single demand curve which corresponds to a specific price.
Externalities are positive or negative effects on outsiders which spillover from economic activities of an individual or a firm and which are not properly priced by the market mechanism.
Production possibility frontier (also called production possibility curve) is a plot that shows the maximum outputs that an economy can produce from the available inputs (i.e. factors of production). Factors that shift PPF include technological change, population growth, natural disasters, etc.