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Economics/Civics > Economics Test 2 Review > Flashcards

Economics Test 2 Review Flashcards

0
Q

What is the law of demand

A

When the price is lower, consumers will buy more

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1
Q

Define demand

A

Desire to own something and the ability to pay for it

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2
Q

What is the substitution effect

A

As prices rise, alternatives are found

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3
Q

What is the demand curve

A

Graph that shows demand based on price

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4
Q

What are the 4 factors leading to a change in demand

A

Population, income, consumer expectations, advertising

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5
Q

Elastic demand

A

Demand is very sensitive to a change in price

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6
Q

Inelastic demand

A

Demand not very sensitive to a change in price

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7
Q

Market share

A

Percent of the market you have

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8
Q

Supply

A

The amount of goods available

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9
Q

Law of supply

A

The higher the price, the more is produced

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10
Q

Supply curve

A

A graph that shows supply based on price

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11
Q

Fixed cost

A

Cost that doesn’t change no matter how much is produced

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12
Q

Variable cost

A

Cost that rises or falls based on the quantity produced

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13
Q

Total cost

A

Fixed and variable costs together

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14
Q

Marginal cost

A

The additional cost of producing one more unit

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15
Q

Subsidy

A

Government payment that supports a business or market

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16
Q

Excise tax

A

Tax on a production or sale of a good

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17
Q

Is demand for gasoline elastic or Inelastic?

A

Inelastic

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18
Q

Elasticity of price increases with?

A

Change in price

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19
Q

Price ceiling

A

The maximum price a good can be

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20
Q

Price floor

A

The minimum price a good can be

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21
Q

Surplus

A

Quantity produced is more than que tofu demanded

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22
Q

Shortage

A

Quantity produced is less than quantity demanded

23
Q

Supply shock

A

Sudden shortage of a good

24
Q

Rationing

A

Allocating scarce goods and services without prices

25
Q

Black market

A

Business without regard for government control

26
Q

Adam smith

A

Author of the Wealth Of Nations

27
Q

Spillover costs

A

Costs of production that affects people not involved. Ex) pollution

28
Q

What are the 4 market structures

A

Monopoly, oligopoly, perfect competition, and monopolistic competition

29
Q

Perfect competition

A

Large number of firms produce the same product

30
Q

Commodity

A

Product that is the same no matter who produces it

31
Q

Monopoly

A

Market dominated by a single seller

32
Q

Natural monopoly

A

Market that runs better with one firm supplying the output

33
Q

Patent

A

License that gives the inventor the exclusive right to sell it got a certain period of time

34
Q

Franchise

A

Right to sell a good or service

35
Q

License

A

Government issued right to sell a good or service

36
Q

.Market power

A

Ability of a company to change prices and output

37
Q

Equilibrium price/ equilibrium quantity

A

Where the two lines on a graph cross

38
Q

Monopolistic competition

A

Many companies sell products that are similar

39
Q

Differentiation

A

Making a product different than other similar products

40
Q

Oligopoly

A

A few large firms dominate a market

41
Q

Price fixing

A

Firms agree to charge one price for the same product

42
Q

Cartel

A

Organization of producers that agree to a coordinate prices and production

43
Q

Merger

A

The combination of 2 or more companies

44
Q

Deregulation

A

Removal of same government controls of a market

45
Q

Sole proprietorship

A

Business owned and operated by one person

46
Q

What are three advantages of a sole proprietorship

A

Organization, profits, taxes

47
Q

What are three disadvantages of a sole proprietorship?

A

Can get sued, limited funds, fragile business existence

48
Q

Business license

A

License by the local/state government to own or operate a business

49
Q

Zoning law

A

City law that separates areas for a business or a residency

50
Q

Liability

A

Legally bound obligation to pay debts

51
Q

Fringe benefit

A

Payment other than wages or salaries

52
Q

Assets

A

Money or valuables belonging to a business

53
Q

FDIC

A

Federal Deposit Insurance Corporation

54
Q

Who are the owners of a corporation?

A

Stock holders

55
Q

Who is elected by stockholders to make decisions?

A

Board of directors

Economics/Civics (8 decks)

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