microeconomics Flashcards
Microeconomics
Study of economics on a small scale i.e. business, individuals
macroeconomics
study of economics on a large scale i.e. national debt
economic interdependence
local or global situation that occurs because we rely on one another to meet our economic needs
circular flow diagram
illustrated model economists use to show the characteristics of and relationship that exists between households and businesses
product market place
where good and services are sold to consumers
factor (resource)
place where households sell resources to businesses
law of supply
an economic principle stating that as the price rises, the quantity of the good consumers are willing to sell increases
law of demand
an economic principle stating that as the price of a good rises, the quantity of the good consumers
quality supplied
amount of goods or services consumers are willing to sell at various prices in the market
quantity demanded
amount of good and services consumers are willing to purchase at various prices in the market
complimentary goods/service
goods or services that go together
goods that can be used in place of another good
substitute goods/services
price where quantity supplied equals quantity demanded
equilibrium price (market clearing price)
instituted by the government, this is the lowest price a product can be sold at
price floor
this is created when supply of a product is greater than the demand for the product
surplus
