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36 Cards in this Set
- Front
- Back
market failure
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a flaw in a price system that occurs when some costs have not been accounted for and therefore are not properly distributed
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externality
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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)
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public good
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is any good or service that is consumed by all members of a group
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market equilibrium
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a situation that occurs when the quantity supplied and the quantity demanded for a product are equal at the same price.
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surplus
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______exists when the quantity supplied exceeds the quantity demanded at the price offered
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shortage
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_______exists when the quantity demanded exceeds the quantity supplied at the price offered
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price ceiling
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is a government regulation that establishes a maximum price for a particular good.
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price floor
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is a government regulation that establishes a minimum level for prices
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minimum wage
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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.
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rationing
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_________is a system in which a government or other institution decides how to distribute a product.
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black markets
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in which goods are exchanged illegally at prices that are higher than officially established prices.
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perfect competition
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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.
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buyers
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or consumers
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sellers
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or producers
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monopoly
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in which one seller controls all production of a good or service.
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monopolistic competition
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differs from perfect competition in one key respect - sellers offer different, rather than identical,products.
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differentiate
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or point out differences, between their products and those of their competitors.
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product differentiation
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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
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nonprice competition
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they compete on a basis other than price
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oligopoly
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a market structure in which a few large sellers control most of the production of a good or service
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interdependent pricing
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or by being very responsive to- or dependent on- the pricing is particularly common in oligopolies.....
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price leadership
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in which one if the largest sellers in the market takes the lead by setting a price for its product.
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price war
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in which sellers agressively undercut each other's prices in an attempt to gain Market share.
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collusion
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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.
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cartel
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in which companies openly organize a system of price setting and market sharing
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natural monopolies
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a market in which competition is inconvenient and impractical and thus efficiency is best achieved by a single seller
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economies of scale
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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
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geographic monopolies
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a market whose ________ area is so limited that a single seller can control an item's manufacture, sale,distribution, or price
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technological monopoly
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a market that is dominated by a single producer because of a new technology it has developed
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patent
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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
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copyrights
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the U.S government gives authors, musicians, and artists exclusive rights to publish, diplicate, perform, display, display, and sell their creative works
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government monopoly
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a market in which a government I'd the sole producer or seller of a product
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Trust
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a group of companies that combine to eliminate competition in an industry and thereby gain a monopoly
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lassiez-faire
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this philosophy states that economic systems prosper when the government does not interfere with the market in any way
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antitrust legislation
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these acts were designed to monitor and regulate bug business, prevent monopolies from forming, and dismantle existing monopolies.
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price discrimination
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the practice of offering different prices to different customers under the same circumstances.
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