Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Quantic MBA > Microeconomics > Flashcards

Microeconomics Flashcards

1
Q

Microeconomics is

A

The study of how individuals, households, and firms make decisions about using limited resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Economic resources include:

A

Human resources (workers and managers) and Nonhuman resources (land, technology,minerals, oil, etc)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Microeconomists assume

A

that people and firms are rational and seek to maximize benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Trade-offs:

A

Choosing one thing requires giving up another

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Scarcity:

A

The existence of limited resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

When an individual or group makes a decision

A

Their opportunity cost is equal to the value of the foregone options

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Economic Units:

A

People, Households, and Firms

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Marginal Benefits:

A

Small, incremental benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The law of demand:

A

When the price of a good increases, demand for it decreases, and vice versa.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Demand schedule:

A

Lists the quantity demanded of a product or service at various prices.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Market demand schedule:

A

A demand schedule that encompasses the entire market’s demand for a good or service at various price points.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Market demand curve:

A

Shows the market demand schedule

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

When demand curves shift left

A

Market demand has decreased

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

When demand curves shift right

A

Market demand has increased

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Utility:

A

The satisfaction gained from consuming a food or service.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

A consumer’s total utility can be

A

positive or negative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Utils:

A

Theoretical units used to measure satisfaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Marginal utility:

A

Utility gained from consuming one more unit of a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Substitute goods:

A

When the increased price of one good increases the demand for the price of another as the customer cannot afford this good and looks for a cheaper substitute

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Complementary goods:

A

When the increase in price of one good decreases demand for another such as flashlights and their batteries

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Price Elasticity of Demand (PED):

A

The percentage change in the quantity demanded of a good or service divided by the percentage change in the price

Used by Sellers to determine the potential loss of customers if prices are raised

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

PED is a measure of how demand for a good changes in relation to a change in price. If a good is elastic:

A

Demand changes greatly in response to price changes & PED > 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

PED is a measure of how demand for a good changes in relation to a change in price. If a good is unit elastic:

A

then the percentage change in quantity demanded is equal to that in price & PED = 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

PED is a measure of how demand for a good changes in relation to a change in price. If a good is inelastic:

A

Demand changes slightly in response to price changes & PED < 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Cross-price elasticity:

A

is a measure of the effect a price change for one substitute good can have on the demand for another.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Profit =

A

Total revenue - total cost

27
Q

Total cost =

A

fixed costs + variable costs

28
Q

Fixed costs:

A

Costs that do not change as the quantity produced changes

29
Q

Variable costs:

A

Costs that change as the quantity produced changes

30
Q

Production function:

A

The relationship between the quantity of inputs and the quantity of outputs

31
Q

Marginal product:

A

The increase in output resulting from adding one more unit of input

32
Q

Diminishing marginal product:

A

When marginal product begins to decrease for each new unit of input

33
Q

Marginal profit:

A

Profit earned on each subsequent unit sold

34
Q

Marginal profit =

A

Marginal revenue - marginal cost

35
Q

Marginal cost:

A

The cost of producing one additional unit of a good

36
Q

Marginal revenue:

A

The revenue generated by each unit sold

37
Q

Average revenue:

A

Total revenue / total number of units sold

38
Q

Profit maximisation:

A

The quantity produced at which marginal revenue equals marginal cost

39
Q

If marginal revenue > marginal cost then

A

increase production

40
Q

if marginal revenue < marginal cost then

A

decrease production

41
Q

Price elasticity of supply:

A

PES is the relationship between the supply of a good or service and how that supply or good is affected by price.

PES is inelastic if a price change has little effect on the quantity supplied of a good. It is elastic if a price change has a large effect on the quantity supplied

42
Q

For some goods such as cars and apartments

A

the market is inelastic in the short run, but elastic in the long run

43
Q

For others such as aquarium fish that become endangered

A

the market supply is elastic in the short run, but inelastic in the long run

44
Q

The supply elasticity curve:

A

graphs PES value from price point to price point

45
Q

Market price:

A

The price at which a good or service is offered in the marketplace

46
Q

Law of supply:

A

When the market price for a good increases, the quantity that suppliers produce and sell increases, and vice versa

47
Q

Supply schedule:

A

Lists the quantity of a product supplied at various price points

48
Q

Supply curve:

A

Plots the supply schedule

49
Q

Market supply:

A

The summation of all of the individual supplies of a good or a service

50
Q

Market supply curve:

A

Shows how the total quantity supplied of a good changes as its price changes

51
Q

When the supply curve shifts left

A

Market supply decreases

52
Q

When the supply curve shifts right

A

Market supply increases

53
Q

Market equilibrium:

A

The point at which the market supply is equal to the market demand.

When the amount of goods supplied is equal to the quantity demanded.

54
Q

Equilibrium price:

A

The price where equilibrium occurs

55
Q

Equilibrium quantity:

A

The quantity where equilibrium occurs

56
Q

Equilibrium point:

A

The point at which the equilibrium price is equal to the equilibrium quantity

57
Q

Price acts as a

A

motivator

58
Q

When there is a low price for goods or services,

A

consumers buy more and sellers supply less

59
Q

When there is a high price for goods or services,

A

consumers buy less and sellers supply more

60
Q

Law of supply and demand:

A

The price of any good will naturally adjust until market equilibrium is reached

61
Q

If supply > demand

A

There is a surplus, Prices will drop until equilibrium is reached

62
Q

If supply < demand

A

There is a shortage, Prices will rise until equilibrium is met

63
Q

Supply = Demand

A

Equilibrium has been reached

64
Q

To recognise events that alter equilibrium:

A
  1. Identify a shift in the DC and/or SC
  2. Determine if the curve(s) shift left or right
  3. Use a graph to see how the shifts change the Equilibrium point

Quantic MBA (7 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions