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
instated by government, the max price that can be charged for a good or service
price ceiling
created when a price is below equilibrium the quantity demand is greater than the shelter
shortage
example of a price floor, instituted by the government , which is the lowest a worker can be paid
minimum wage
price ceiling created by the government that creates affordable pricing in shelter
rent control housing
sole proprietorship
business type where one owner has total responsibility for debts
debts of a business are divided amongst one owner
shared liability
business type with two or more owners with shared liability and responsibility
partnership
corporation
business type where the company is owned by shareholders
market structure where the producer has total controller good and services
monopoly
oligopoly
market structure with few competitors
market structure where several competitors sell a differentiated good and service
monopolistic
market structure with many sellers selling and identical product
pure (perfect) competition
