1140 Flashcards
What are grown, mined, or manufactured commodities;
Goods;
What value is based on the value and scarcity of a products components and labor required to produce it;
Intrinsic value;
What is consumer satisfaction received from a good or service; what is a satisfaction derived from the consumption of one unit of that good or service; what is the decrease in satisfaction provided by the consumption of each individual unit
Utility; marginal utility; diminishing marginal utility
An expression of value in terms of money
Price
What are the five limiting factors of production in a free market economy
Capital
natural resources
management
labor
What is determined by the interaction of supply and demand
Market price
The quantity of a good or service available for sale
Supply
The desire for a good or service coupled with the ability and willingness to purchase it
Demand
What five things can demand be influenced by
The price of a product or service The urgency of the consumers need The supply of the product or service The utility of the product or service Consumer income
What is a demand or Supply schedule
A supply or demand schedule is a table listing amount of product consumers will purchase at various prices, in a specific Market, at a given point in time
What is a demand or supply curve
A demand or supply curve is a graph showing information from a demand or Supply schedule
What four changes may cause a shift in demand
A change in consumer income
A change in the price of alternative choices
A change in consumer expectations
A change in consumer tastes and preferences
What occurs when Supply exceeds demand; what results when demand exceeds Supply
Surplus; shortage
What happens during a long run
All production factors may be varied
What happens during a short run
Only some production factors may be varied
Which run is price a major influence on Supply
Short run
What’s run is cost of production and Technology a major influence
Long run
What are inelastic supplies
Agricultural products
What are elastic supplies
Luxuries
The market always tends toward what
Equilibrium
What price is the price at which supply and demand are equal and all elements of the market are satisfied
Equilibrium
What equilibrium occurs when there is a period of perfect inelasticity of Supply in which the supplier cannot expand production and the supply is fixed
Instantaneous
What is a fixed lower limit for Price or wage; what is a fixed upper limit
Floor; ceiling
What are the methods of eliminating a Surplus
Increasing demand
Decreasing Supply
Lowering price until the Surplus is sold
What are the methods of eliminating a shortage
Increasing Supply
Increasing price and production
Decrease in demand
What are activities performed for others
Services
What value is based on the consumer’s idea of the products usefulness to him
Subjective value
What things can supply be influenced by
Cost of production, technology, time, price
What are the two laws of supply
Supply varies directly with price… the higher the price the greater the supply
What are the two laws of demand
Demand varies inversely with price; the lower the price of Greater the demand
It takes a longer period of time to increase the supply of a good with an what Supply but supplies of goods with an what Supply can be increased in a short time
Inelastic… Elastic
