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34 Cards in this Set
- Front
- Back
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Micro Economjcs |
Deals with the study of specific components within a major economy and how the choices made by individuals households and businesses affect that economy |
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Good |
Tangible item that people want and for which they will pay |
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Service |
Intangible goods produced by labor for which people expect to pay |
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Producers/consumers |
Provide a good/use a good |
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Capital |
Anything used in the production and distribution of goods and services |
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Tariff |
Taxes that governments apply only to imported goods |
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Adam smith |
Founder of modern economics/ wrote the wealth of nations |
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Physiocrats |
Wanted a natural economy |
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4 factors of production |
1. Natural Resources 2. Labor 3. Capital 4. Entrepreneurship |
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Marginal utility |
Amount of satisfaction that results from a one unit increase of a product and tends to become smaller with each additional unit |
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Total utility |
Total amount of satisfaction received from possessing a particular amount of a good |
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Normal good |
A good who's demand is directly related to consumers income |
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Equalibrium |
The point at which quantity demanded and quantity supplied are equal |
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Market sygmals |
Signs that are used by consumers and producers to determine how much of a good to buy or sell at a given price and time |
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Durable/nondurable |
Good that have a life expectancy of less than three years/goods that don't |
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Black matket |
Shadowy underground systems |
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Profit |
Excess of the total revenue paid by buyers for goods over the sellers total expense of producing those goods |
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Opportunity cost |
The value of the best alternative that is for gone when a different alternative is taken |
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Equity |
The total value of the business minus any liabilities |
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Industries |
Groups of firms that produce similar products or provide similar services |
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Perfect competition |
The purest form of competition |
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Monopoly |
The situation that arises when a single firm is the only supplier of a good for which no substitute exist |
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Monopolistic competition |
Market where one in each firm promotes a differentiated product |
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Oligopoly |
A market that occurs when an industry is dominated by only a few firms |
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Sherman act |
1890-Enacted by the government in reaction to the large monopolistic trust of the late 1800s |
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Clayton act |
Government outlawed several practices that were not specifically addressing earlier laws |
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Ftc |
Federal trade commission |
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Tying contract |
Forces the consumer to buy a certain product before he can buy the product he really wants |
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Price discrimination |
Selling the same type of goods at different prices to different buyers |
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Input |
The total amount invested in the production of a good |
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Output |
Total amount of the good that is produced |
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Absolute advantage |
The ability of one entity to produce goods or provide services more efficiently than his competitors when given the same resources |
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Comparative advantage |
The ability of an entity to produce a good or provide a service an opportunity cost that is lower than that of another producer |
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Free trade |
Whenever there are no restrictions or penalties placed upon the exchange of goods |
