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22 Cards in this Set
- Front
- Back
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what is demand?
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the relationship between alternative prices and the quantities of a good or service that consumers are willing to buy during a time period, other this equal.
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what is the law of demand?
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states price and quantity demanded are inversley related, other things equal.
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what is an income effect?
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indicates price increases are like reductions in income; consumers will decrease the quantity demanded.
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what is substitution effect?
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as the price of a product decreases, that product becomes cheaper relative to other goods and services.
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what will cause change in quantity demand?
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changes in the price.
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What are the non-price determinants of demand?
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number of consumers, consumer tastes and preferences, consumber income, prices of related goods, consumer expectations.
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When is the price elasticity of demand for a product elastic or inelastic?
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how responsive people are to the price change.
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what will cause change in demand?
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changes in non-price determinatnts.
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What is a sole proprietorship
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self or married
:you have to get the money for the resources :any lost in the company is yours :takes alot of your time. :total control, and keep profit |
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what is partnership,
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two or more people own business
:share profit :share dicisions making :both liable for business :more finance :share time :open more stores |
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what is corporations?
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established with legal frame work
:decison is made by board of directors :finacied by stock holders :stock owners don't get part of ownership :you may not be informed :share of profit |
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What is a production function?
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looks at alternative combinations of inputs to produce highest level of outputs
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What is productivity?
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measuremtn of output compared to the use of input
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What is an increase in productivity?
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:specialist &divison of labor
:invest in capital resources :invest in Human Capital(level of people skill and knowledge) |
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What is average productivity?
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total output/#of workers
for a specified time period. |
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What is marginal product
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measures how output will change when input are increased.
change of output/change of input |
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What is marginal cost?
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extra cost of producing extra units of outputs
change in cost/ change in output(MP) |
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What is the relationship between marginal product and marginal cost?
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MP increases the MC decreases
MP decreases the MC increases |
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What is the difference between a craftsperson and a specialist?
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craftsperson-quality, pride,ownership, variety. takes more time less quantity,
specialist- more output, more experience, no wait. bordom, no ownership/pride, absenteesism. |
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How does division of labor enhance the production process
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it creates more product for less time.
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Explain the Law of Diminishing Returns.
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as one input is increasing; while holding other inputs constant, the marginal product of the input will eventually fall.
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Explain the three ways a firm can increase its productivity.
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1.investing in training and education
2.better working conditions 3. not by hiring extra people. |
