key economic terms Flashcards
What is demand in business?
The willingness of clients to buy commodities at particular prices.
What does the law of demand indicate?
When prices of commodities are higher, the demand for those commodities goes down.
What are the factors affecting demand?
Consumers’ income.
Price of the product.
Consumers’ expectations.
Preferences of clients.
Number of customers.
Prices of related goods.
What is the difference between demand and quantity demanded?
Demand is the number of commodities that consumers are willing to purchase during a period of time.
Quantity demanded refers to the number of commodities people will purchase at a particular price at a specific time.
What is the demand curve?
A representation of price against quantity demand for a period of time in a graph.
What does movement along the demand curve indicate? za
A change in the quantity demanded.
What is a Giffen good?
Products that customers consume more of when their prices rise.
What is a Veblen good?
High-quality goods bought by wealthy consumers that do not follow the Law of Demand.
What are the exemptions to the Law of Demand?
Giffen goods
Veblen goods
Income changes1`
What is the definition of supply in economics?
The amount of an item that is available for use or purchase.
What does the law of supply state in economics?
Supply will increase as price increases.
What is the main difference between individual and market supply?
Individual supply refers to the amount of goods one seller offers.
Market supply is the total amount offered by the entire market.
What does the law of supply state?
Supply increases as price increases to maximize profits.
What is the scarcity principle?
Consumers place a higher value on resources that are scarce.
What are the 2 types of scarce resources in economics?
Relative scarcity: Limited by the demand for the resource.
Absolute scarcity: Actual number on the amount of resources left in existence.
What is a mixed market?
Economic system that incorporates elements of both capitalism and socialism.
Combines private and public ownership or control of resources and industries.
What is the difference between a bull and a bear market?
Bull market: a period of rising prices in financial markets, typically associated with increased investor confidence, economic growth, and optimism.
Bear Market: a period of declining prices in financial markets, often associated with declining investor confidence, economic slowdown, and pessimism.
What is socialism?
Economic system where the means of production (factories, resources, and capital) are owned and controlled by the state or public entities to ensure equal distribution of wealth and eliminate class distinctions.
What is communism?
Economic and political ideology advocating for a classless society where all property and resources are communally owned, eliminating private ownership.
What was feudalism?
Medieval European economic and social system based on the hierarchy of lords, vassals, and serfs, where land ownership and duties are exchanged for military service and labor.
What was mercantilism?
Economic policy prevalent in Europe from the 16th to the 18th centuries, aimed at accumulating national wealth through a favorable balance of trade and the control of colonial resources.
What is a command economy?
Economic system where the government makes all decisions regarding the production and distribution of goods and services.
