Microeconomics and Business

Question 1

durable good

Answer 1

good expected to be used for more than 1 year

Question 2

nondurable good

Answer 2

good expected to be used for less than 1 year

Question 3

service

Answer 3

transaction wherein no physical goods are exchanged

provides intangible benefit or action which 1 values

Question 4

plant

Answer 4

physical establishment that aids in production and distribution of goods and services

Question 5

firm

Answer 5

organization that uses resources to produce and sell products

Question 6

industry

Answer 6

group of businesses which provide similar goods and services

Question 7

sole proprietorship

Answer 7

unincorporated business owned by 1 person

Question 8

unlimited liability

Answer 8

legal obligations of sole proprietorships and partnerships to pay all business debts

Question 9

partnership

Answer 9

unincorporated business owned by more than 1 person

Question 10

corporation

Answer 10

incorporated legal entity distinct from the individuals who own them

accounts for minority of all businesses

accounts for majority of all sales

Question 11

stock

Answer 11

share of ownership in company

Question 12

bond

Answer 12

loan of money to company in exchange for repayment with interest

Question 13

elasticity of demand

E_D

Answer 13

measurement of consumer responsiveness to price change

Question 14

elasticity of demand formula

Answer 14

Question 15

elastic demand

Answer 15

change in demand of more than 1%

Question 16

inelastic demand

Answer 16

change in demand of less than 1%

Question 17

graph of elastic demand

Answer 17

Question 18

graph of inelastic demand

Answer 18

Question 19

influences on elasticity of demand

Answer 19

availability of substitutes

necessity

share of consumer’s budget

matter of time

Question 20

effect of availability of substitutes on elasticity of demand

Answer 20

more available and similar substitutes cause higher elasticity of demand

Question 21

effect of necessity on elasticity of demand

Answer 21

more necessity decreases elasticity of demand

Question 22

effect of size of consumer’s budget on elasticity of demand

Answer 22

smaller consumer’s budget increases elasticity of demand

Question 23

effect of matter of time on elasticity of demand

Answer 23

finding substitutes takes time

matter of time decreases elasticity of demand in short run

matter of time increases elasticity of demand in long run

Question 24

marketing

Answer 24

process of anticipating, identifying, and satisfying customer demand profitably

Question 25

short run

Answer 25

period of time where at least 1 of firm’s resources is fixed

Question 26

long run

Answer 26

period of time where all of firm’s resources are variable