Week 4 Flashcards
Market
Where buyers & sellers come together to exchange G & S, is a voluntary exchange
Market economy
The buying & selling of G&S is driven by consumers & producers based on supply and demand.
Command economy
Resources are owned collectively, with the gov making the economic decisions
Mixed economy
When the 2 market forces and limited amounts of gov involvement is there to determine the allocation of resources.
Law of diminishing returns
point at which adding more of a variable factor, like labor, leads to a decreasing productivity.
Product market
The buying & selling of finished G&S, where households are the demand and firms are the supply.
Factor market
The buying and selling of resources or factors of production, where households are the supply & firms are the demand.
Competitive market
Lots of buyers & sellers, where consumers name the prices, multiple producers of similar products
Imperfect market
Small number of firms, difference in productions, firms name prices
Law of supply & demand
Prices of any good adjusted to bring quantity supplied & demanded into balance
