question
product market
answer
the market in which households purchase the goods and services that firms produce
question
factor/resource market
answer
market in which firms purchase the factors of production from households
question
demand
answer
the desire to own something and the ability to pay for it
question
quantity demanded
answer
the amount of a good that buyers are willing and able to buy at a particular price and time
question
law of demand
answer
as prices increase, quantity demanded decreases; as price decreases, quantity demanded increased
question
supply
answer
the quantity of something that producers have available for sale
question
quantity supplied
answer
the amount of a good that producers are willing and able to sell at a particular price and time
question
law of supply
answer
as prices increase, quantity supplied increases; as price decreases, quantity demanded decreases
question
equilibrium/market clearing price
answer
when quantity demanded = quantity supplied at the same time
question
shortage
answer
quantity demanded exceeds quantity supplied at market price
question
surplus
answer
quantity supplied exceeds quantity demanded at market price
question
price ceiling
answer
a government imposed maximum price for a product
question
price floor
answer
government imposed minimum price for a product
question
sole proprietorship
answer
owned and operated by one person
easy to set up
lack of permanence & ease of exit
unlimited personal liability
easy to set up
lack of permanence & ease of exit
unlimited personal liability
question
partnership
answer
a business owned by two or more people
gives more $ to start
allows specialization of labor
partner confrontation
unlimited personal liability
gives more $ to start
allows specialization of labor
partner confrontation
unlimited personal liability
question
corporation
answer
A business that is owned by many investors and has their own legal identity
protected from personal liability
public give $ to expand & increase
lose control of business started
get "double taxed" (stock, dividends...)
protected from personal liability
public give $ to expand & increase
lose control of business started
get "double taxed" (stock, dividends...)
question
horizontal merger
answer
companies that make the same product
question
vertical merger
answer
one supplies the ingredient of the others product
question
franchise
answer
when you pay a fee to someone to open their business
built in support
benefit from nationwide advertisement
name recognition
fees can be expensive
built in support
benefit from nationwide advertisement
name recognition
fees can be expensive
question
conglomerate
answer
unrelated products
question
multinational corporation
answer
a corporation that owns businesses in two or more countries
question
perfect (pure) competition
answer
very many firms
homogeneous product
easy entry in market
no power
highly affichent
ex. agriculture
homogeneous product
easy entry in market
no power
highly affichent
ex. agriculture
question
monopolistic competition
answer
many firms
differentiated product
relatively easy entry
some power
efficient
ex. retail, restaurants, shoes
differentiated product
relatively easy entry
some power
efficient
ex. retail, restaurants, shoes
question
oligopoly
answer
few firms
differentiated product
not easy entry
limited power
less efficient
ex. soft drinks, cars, computer software
differentiated product
not easy entry
limited power
less efficient
ex. soft drinks, cars, computer software
question
monopoly
answer
one firm
only product of its time
impossible entry
absolute power
inefficient
ex. patent drug
only product of its time
impossible entry
absolute power
inefficient
ex. patent drug
question
barriers to entry
answer
things that make it difficult to enter the market
question
product differentiation
answer
product can be made in different forms
question
natural monopoly
answer
out of the ordinary- functions efficiently
very rare
very rare
question
economies of scale
answer
as you produce more and more of something, the cheaper it becomes to produce
question
collusion
answer
businesses working together to price fix
(illegal in the US)
(illegal in the US)
question
cartel
answer
organization that works to fix prices and set production
practice collusion
practice collusion
question
circular flow
answer
shows how resources and final goods and services flow through the economy
question
five determinates of demand
answer
(tribe)
Tastes & preferences
Related goods prices
Income of consumer
# of Buyers
Expectations of consumers
Tastes & preferences
Related goods prices
Income of consumer
# of Buyers
Expectations of consumers
question
six determinates of supply
answer
(rotten)
Resource prices
Other products prices
Taxes & subsidies
Technology
Expectations of producers
Number of sellers
Resource prices
Other products prices
Taxes & subsidies
Technology
Expectations of producers
Number of sellers
question
increase in demand = _______________________
answer
increase in price, increase in quantity
question
decrease in demand = _______________________
answer
decrease in price and quantity
question
increase in supply = _______________________
answer
decrease in price and increase in quantity
question
decrease in supply = _______________________
answer
increase in price and decrease in quantity
question
binding price ceiling
answer
when the price ceiling is below the equilibrium price
question
non-binding price ceiling
answer
when a price ceiling is above the equilibrium price
question
binding price floor
answer
when the price floor is above the equilibrium price
question
non-binding price floor
answer
when the price floor is above the equilibrium price
question
elastic demand
answer
A situation in which consumer demand is sensitive to changes in price
question
reasons for elastic demand
answer
substitues
time
necessity
% of income
time
necessity
% of income
question
elasticity number
answer
less than 1 = inelastic
more than 1 = elastic
more than 1 = elastic
question
normal good
answer
a good that consumers demand more of when their incomes increase
question
inferior good
answer
a good that consumers demand less of when their incomes increase
question
elastic demand formula
answer
5 chance in QD / % change in price
question
price discrimination
answer
when you divide customers into groups on how much they can pay
ex. airline tickets
ex. airline tickets
question
manufactures rebates
answer
printers, pay $100 rebate, those who fill out the form receive the money back
question
types of non-price competition
answer
-advertising/image/status
-service level (chick-fil-a, amazon)
-physical characteristics
-location
-service level (chick-fil-a, amazon)
-physical characteristics
-location
question
non-profit organization
answer
a business whose goal is to provide a service rather than to make a profit
ex. red cross, YMCA, must ministries
ex. red cross, YMCA, must ministries
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
