Economics, 3rd Edition

sub-prime market 

individuals not traditionally seen as being 

part of the financial markets because of their high credit risk

subsidy 

payment to buyers and sellers to supplement income 

or lower costs and which thus encourages consumption or 

provides an advantage to the recipient

substitutes 

two goods for which an increase in the price of one 

leads to an increase in the demand for the other

substitution effect 

the change in consumption that results 

when a price change moves the consumer along a given 

indifference curve to a point with a new marginal rate of 

substitution

sunk cost 

a cost that has already been committed and cannot be 

recovered

supply curve 

a graph of the relationship between the price of a 

good and the quantity supplied