Market Structures

Question 1

a market characterized by a small number of firms who realize they are interdependent in their pricing and output policies

Answer 1

Oligopoly

Question 2

power of being the only seller

Answer 2

Monopoly

Question 3

power of being the only buyer; not a price taker

Answer 3

Monopsony

Question 4

anything that affects the outcome of your choices that can associated with a probability

Answer 4

Risk

Question 5

how our experiences (socialization, advertising, etc.) impact how we value risk

Answer 5

Risk perception

Question 6

individuals dividing up labor within/across trades

Answer 6

Specialization

Question 7

increases productivity as individuals are better able to become more dexterous when they focus on one task

Answer 7

Division of labor

Question 8

what an individual/nation is absolutely better at

Answer 8

Absolute advantage

Question 9

the ability to produce a good at a lower opportunity cost that the person or country one trades with

Answer 9

Comparative advantage

Question 10

unfair outcomes due to inequality of the implementation of rules

Answer 10

Unjust outcomes

Question 11

an abstraction that simplifies a scenario

Answer 11

Assumptions

Question 12

unrealistic assumptions (weak assumptions are more realistic); to relax assumptions we go from strong to weak assumptions

Answer 12

Strong assumptions

Question 13

the act of deriving utility (sometimes using things, but only with goods)

Answer 13

Consumption

Question 14

a situation where one maximizes utility in the face of scarcity

Answer 14

Constrained Optimization Problem

Question 15

fairness of the rules by which the “market game” is played

Answer 15

Commutative justice

Question 16

items that function as money but are also valuable themselves

Answer 16

Commodity money

Question 17

items not valuable as a commodity but function as money because a government states that they are usable for debts

Answer 17

Fiat money