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52 Cards in this Set
- Front
- Back
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place where the buyers and sellers are exchanging goods and services. |
MARKET |
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market situation which consist of a very large number of buyers and sellers offering a homogeneous product. |
PERFECT MARKET |
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Market situation wherein the condition necessary for perfect competitions are not satisfied |
Imperfect Market |
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The firm is assumed to be able to alter its rate of production and sales within any feasible range, without such action having a significant effect on the price of the product it sells |
Perfect Competition |
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Comes from the Greek word "monos" which means one and pop win which means to sell |
MONOPOLY |
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Characterized by only one producer in the industry. |
MONOPOLY |
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Market situation in which firms agree to cooperate with one another to behave as if they were a sing,e firm thus eliminate competitive behavior among them. |
CARTEL |
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Single firm can supply the entire market due to the fundamental cost structure of the industry. |
Natural Monopoly |
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Sometimes called de jure monopoly |
Legal monopoly |
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The government grants to a private individual or firm over the product or service |
Legal monopoly |
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A form of monopoly whose existence as the sole producer and distributor of goods and services is by means of coercion. |
Coercive monopoly |
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It violates the principle of free market just to avoid competition |
Coercive monopoly |
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There is a limited control of price because of product differentiation |
Monopolistic competition |
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Sellers offer differentiated or similar product but not identical products |
Monopolistic competition |
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The firm has control over price because of the small number of firms providing the entire supply of a certain product |
Oligopoly |
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There is an extreme difficulty for new competitors to enter the market |
Oligopoly |
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Few sellers produce identical products |
Pure oligopoly |
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Few sellers of differentiated products |
Differentiated oligopoly |
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Two producers exist in a given market |
Duopoly |
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A formal agreement among oligopolists to set up a monopoly price, allocate output, and share profit among members |
Cartel |
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A formal or informal agreement among ologopolists to adopt policies that will restrict or reduce the level of competition in the market |
Collusion |
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Market situation where there is only one buyer of goods and services in the market |
Monopsony |
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A market situation where there are small number of buyers competing to obtain the factors of production |
Oligopsony |
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Refers to using up of resources.. it is the money spent on goods and services which yield satisfaction |
Consumption |
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Refers to the relationship between total consumption expenditure in the economy and total consumers income |
Consumption function |
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There is a change in income there is also a change in consumption behavior |
Consumption patterns |
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Categories of consumption |
1. Durable goods 2. Nondurable goods 3. Services |
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Determinants of consumption |
1. Income 2. Distribution of national income 3. Price level 4. Consumers expectation 5. Interest rate 6. Taxes 7.Population 8. Desire to hold cash 9. Attitudes and values 10. Wealth |
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Refers to the proportion of income devoted to consumption |
Average prosperity to consume (APC) |
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The portion of a small increase in income which will be devoted to increased consumption expenditures |
Marginal prosperity to consume (MPC) |
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Difference between disposable income and consumption expenditures |
Savings |
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A portion of income that is saved |
Average prosperity to save (APS) |
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The portion of an increase in income that is saved |
Marginal propensity to save (MPS) |
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Measure of the money value of the total flow of goods and services produced in an economy over a specified period of time |
National income |
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Generated by labor |
Salary/wages |
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Generated by lenders of funds |
Interest |
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Generated by owners of real estate |
Rent |
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Generated by entrepreneurs |
Profit |
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Income from abroad |
Net factor |
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The sum of the market value of all final goods and services produced by the citizens of a country during a given period |
Gnp |
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A measure or total flow of goods and services produced by the economy over a particular period. |
Gross domestic product |
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Factors of production must be located in a domestic economy regardless of who owns these factors |
GDP |
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Refers to the current price of goods and services produced in the economy Measured in monetary value |
Market value |
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Refers to the difference between the value of goods produced and the cost of materials and supplies used in producing them |
Value added |
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Refers to the expenditure by consumers in final goods and services |
Consumption |
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Total amount spent by consumers on newly produced goods and services excluding purchases of new homes which are considered as investment goods |
Consumption |
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Is an activity that uses resources now in such a way that they allow for greater production in the future, and hence, greater consumption in the future |
Investment |
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A good that is purchased to be used in order to make other goods and services |
Fixed investments |
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Those used to increase the amount of inventories of finished products |
Inventory investment |
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Are consumer goods , such as appliances and furniture that usually last for several years |
Consumer durables |
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They are not considered investment because they do not increase the capacity of production |
Consumer durables |
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The sum of government payrolls and purchases which is the cost of government output The sum of all expenses incurred by the government |
Government expenditure |
