Microeconomics definitions

Question 1

Competition

Answer 1

process in which rivals compete in order to achieve some objective

Question 2

Market

Answer 2

any type of arrangement where buyers and sellers of goods, services or resources are linked together to carry out an exchange

Question 3

Differentiate between demand and quantity demand

Answer 3

Demand — refers to consumers being willing and able to purchase/buy a good or service at different prices levels over a given time period

Quantity demanded — refers to the willingness of consumers to purchase/buy a specific quantity of a specific product or services at a specific price

Question 4

Define consumer and produce surplus

Answer 4

Consumer surplus — defined as the highest price consumers are willing and able to pay minus the price they actually paid

Produce surplus. – defined as the price firms receive for selling a good minus the lowest price that they are willing to accept to produce a good

Question 5

welfare

Answer 5

amount of consumer surplus produce surplus