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Economics > Market Structures > Flashcards

Market Structures Flashcards

1
Q

Perfect Competition

A

Market structure in which a large number of firms all produce the same product (no single seller controls supply or prices)

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2
Q

Commodity

A

Product that is the same no matter who produces or sells it, such as petroleum, notebook paper, or milk,

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3
Q

Barrier to Entry

A

Any factor that makes it difficult for a new firm to enter a market

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4
Q

Imperfect competition

A

Expenses a new business must pay before it can begin to produce and sell goods

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5
Q

Start-Up Costs

A

Expenses a new business must pay before it can begin to produce and sell goods

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6
Q

Monopoly

A

Market dominate by a single seller

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7
Q

Economy of Scale

A

Factors that cause a producer’s average cost per unit to fall as output rises

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8
Q

Natural Monopoly

A

Market that runs most efficiently when one large firm supplies all of the output

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9
Q

Government Monopoly

A

Monopoly created by the government

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10
Q

Patent

A

License that gives the inventor of a new product the exclusive right to sell it for a certain period of time

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11
Q

Franchise

A

Right to sell a good or service within an exclusive market

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12
Q

License

A

Government issued right to operate a business

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13
Q

Price discrimination

A

Division of customers into groups based on how much they will pay for a good

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14
Q

Market power

A

Ability of a company to change prices and output like a monopolist

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15
Q

Monopolistic Competition

A

Market structure in which many companies sell products that are similar but not identical

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16
Q

Differentiation

A

Making a product different from other similar products

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17
Q

Nonprice Competition

A

Way to attract customers through style, service, or location, but not a lower price

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18
Q

Oligopoly

A

Market structure in which a few large firms dominate a market

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19
Q

Price War

A

Series of competitive price cuts that lowers the market price below the cost of production

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20
Q

Collusion

A

Agreement among firms to divide the market, set prices, or limit production (illegal)

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21
Q

Price fixing

A

Agreement among firms to charge one price for the same good (illegal)

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22
Q

Cartel

A

Formal organization of producers that agree to coordinate prices and production

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23
Q

4 Types of Market Structures

A

Perfect Competition
Monopolies
Monopolistic Competition
Oligopolies

24
Q

Money

A

Anything that serves as a medium of exchange, a unit of account, and a store of value

25
Q

Medium of Exchange

A

Anything that is used to determine value during the exchange of goods and services

26
Q

Barter

A

The direct exchange on one set of goods or services for another

27
Q

Unit of Account

A

A means for comparing the values of goods and services

28
Q

Store of Value

A

Something that keeps its value if it is stored rather than used

29
Q

Currency

A

Coins and paper bills used as money

30
Q

Commodity Money

A

Objects that have value in themselves and that are also used as money

31
Q

Representative Money

A

Objects that have value because the holder can exchange them for something else of value

32
Q

Fiat Money

A

Money that has value because the government has ordered that it is an acceptable means to pay debt

33
Q

Bank

A

An institution for receiving, keeping, and lending money

34
Q

National Bank

A

A bank chartered, or licensed, by the national government

35
Q

Bank Run

A

Widespread panic in which great numbers of people try to redeem their paper money

36
Q

Greenback

A

Paper currency issued during the Civil War

37
Q

Gold Standard

A

A momentary system in which paper money and coins are equal to the value of a certain amount of gold

38
Q

Federal Reserve System

A

The nation’s central banking system

39
Q

Central Bank

A

Bank that can lend to other banks in times of needs

40
Q

Member Bank

A

Bank that belongs to the Federal Reserve System

41
Q

Federal Reserve Note

A

The national currency we use today in the United States

42
Q

Great Depression

A

The severe economic decline that began in 1929 and lasted for more than a decade

43
Q

Federal Deposit Insurance Corporation

A

The government agency that insures customer deposits if a bank fails

44
Q

Money Supply

A

All the money available in the United States economy

45
Q

Liquidity

A

The ability to be used as, or directly converted to, cash

46
Q

Demand Deposit

A

The money in checking accounts

47
Q

Money Market Mutual Fund

A

a fund that pools money from small savers to purchase short-term government and corporate securities

48
Q

Fractional Reserve Banking

A

A banking system that keeps only a fraction of funds on hand and lends out the remainder

49
Q

Default

A

Failure to pay back a loan

50
Q

Mortgage

A

A specific type of loan that is used to buy real estate

51
Q

Credit Card

A

A card entitling its holder to buy goods and services based on holder’s promise to pay for these goods and services

52
Q

Interest

A

The price paid for the use of borrowed money

53
Q

Principal

A

The amount of money barrowed

54
Q

Debit Card

A

A card used to withdraw money

55
Q

Creditor

A

Person or institution to whom money is owed

Economics (15 decks)

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