Unit 3 Ch 5-6

Front 1

market failure

Back 1

a flaw in a price system that occurs when some costs have not been accounted for and therefore are not properly distributed

Front 2

externality

Back 2

an effect that an economic activity has on people and businesses that are neither producers nor consumers of the good or service being produced. An _________ may be either positive (benficial) or negative (harmful)

Front 3

public good

Back 3

is any good or service that is consumed by all members of a group

Front 4

market equilibrium

Back 4

a situation that occurs when the quantity supplied and the quantity demanded for a product are equal at the same price.

Front 5

surplus

Back 5

______exists when the quantity supplied exceeds the quantity demanded at the price offered

Front 6

shortage

Back 6

_______exists when the quantity demanded exceeds the quantity supplied at the price offered

Front 7

price ceiling

Back 7

is a government regulation that establishes a maximum price for a particular good.

Front 8

price floor

Back 8

is a government regulation that establishes a minimum level for prices

Front 9

minimum wage

Back 9

is another example of a price floor. established by federal law this wage is the lowest amount an employer legally can pay a worker for a job.

Front 10

rationing

Back 10

_________is a system in which a government or other institution decides how to distribute a product.

Front 11

black markets

Back 11

in which goods are exchanged illegally at prices that are higher than officially established prices.

Front 12

perfect competition

Back 12

is an ideal market structure in which buyers or consumers and sellers or producers each compete directly and fully under the laws of supply and demand.

Front 13

buyers

Back 13

or consumers

Front 14

sellers

Back 14

or producers

Front 15

monopoly

Back 15

in which one seller controls all production of a good or service.

Front 16

monopolistic competition

Back 16

differs from perfect competition in one key respect - sellers offer different, rather than identical,products.

Front 17

differentiate

Back 17

or point out differences, between their products and those of their competitors.

Front 18

product differentiation

Back 18

an attempt by a seller in monopolistic competition to convince buyers that it's product is different from and superior to the nearly identical products of competitors

Front 19

nonprice competition

Back 19

they compete on a basis other than price

Front 20

oligopoly

Back 20

a market structure in which a few large sellers control most of the production of a good or service

Front 21

interdependent pricing

Back 21

or by being very responsive to- or dependent on- the pricing is particularly common in oligopolies.....

Front 22

price leadership

Back 22

in which one if the largest sellers in the market takes the lead by setting a price for its product.

Front 23

price war

Back 23

in which sellers agressively undercut each other's prices in an attempt to gain Market share.

Front 24

collusion

Back 24

when sellers secretly agree to set production levels or prices for their products- is illegal and carries heavy penalties such as fines and even prison sentences for those involved.

Front 25

cartel

Back 25

in which companies openly organize a system of price setting and market sharing

Front 26

natural monopolies

Back 26

a market in which competition is inconvenient and impractical and thus efficiency is best achieved by a single seller

Front 27

economies of scale

Back 27

this is the seller's large scale, or size, allows it to use its human, capital, and other resources more efficiently and economically than if those resources were divided among several smaller producers

Front 28

geographic monopolies

Back 28

a market whose ________ area is so limited that a single seller can control an item's manufacture, sale,distribution, or price

Front 29

technological monopoly

Back 29

a market that is dominated by a single producer because of a new technology it has developed

Front 30

patent

Back 30

grants a company or an individual the exclusive right to produce,use, rent and sell an invention or discovery for a limited time-17 years in the United States

Front 31

copyrights

Back 31

the U.S government gives authors, musicians, and artists exclusive rights to publish, diplicate, perform, display, display, and sell their creative works

Front 32

government monopoly

Back 32

a market in which a government I'd the sole producer or seller of a product

Front 33

Trust

Back 33

a group of companies that combine to eliminate competition in an industry and thereby gain a monopoly

Front 34

lassiez-faire

Back 34

this philosophy states that economic systems prosper when the government does not interfere with the market in any way

Front 35

antitrust legislation

Back 35

these acts were designed to monitor and regulate bug business, prevent monopolies from forming, and dismantle existing monopolies.

Front 36

price discrimination

Back 36

the practice of offering different prices to different customers under the same circumstances.