Unit 2 Flashcards
What are substitutes ?
Products that can be used in place of other products example, a rise in butter causes on increase of demand of margarine. The demand for a product tends to decrease if the price of the substitute goes down.
What are complements
Goods that increase the use of the other like computer sales and software sales.
What is an equilibrium price ?
When the Supply and demand curves intersect at a specific point where the number of units produced equals the number of units sold.
What is a shortage ?
A situation where the quantity supplied is less than the quantity demanded at a given price.
What is a price ceiling ?
A maximum legal price that can be charged for a product .
What is a price floor ?
The lowest legal price that can be paid for a good or service.
What is perfect competition ?
A market structure characterized by a large number of well-informed independent buyers and sellers who exchange identical markets .
What is Monopolistic Competition?
The market structure that has all the conditions of perfect competitions except identical products are generally similar in range of clothing , shoes and jewelry.
What is an Oligopoly ?
A market structure in which a few large sellers dominate the industry .
What is a public good ?
Goods and services whose benefits are available to everyone and are paid for collectively.
What is Negative Externality?
The harm cost or inconvenience suffered by a third party because of actions of others.
What is positive externality ?
The beneficial side effect that effects an uninvolved third party.
What is Macroeconomics?
The branch of economics that deals with the economy as a whole.
What is change in quantity demanded?
A movement along the demand curve that shows change in the quantity of the product purchased in response to a change in price .
