An institution that brings together buyers ("demanders") and sellers ("suppliers") of particular goods, services, or resources.
What is a market?
100
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What is demand?
100
In the circular flow model, these entities consume the goods and services produced by the bussinesses.
What are households?
100
THe responsiveness of consumers to a price change is measured by a product's _____.
What is the price elasticity of demand?
100
Unerproduction and underallocation of resources result when these are present.
What are spillover benefits or positive externalities?
200
This effect indicates that a lower price increases the purchasing power of a buyer's money income, enabling the buyer to purchase more of the product than she or he could buy before.
What is the income effect?
200
A schedule or curve showing the amounts of a product that producers are willing and able to make available for sale at each of a series of possible prices during a specific period.
What is supply?
200
A business owned and operated by one person.
What is a sole proprietorship?
200
When a percentage change in price and the resulting percentage change in quantity demanded are the same.
What is unit elasticity?
200
The tendency of one party to alter her or his behavior, after a contract is signed, in ways that could be costly to the other party.
What is the moral hazard problem?
300
In any specific time period, each buyer of a product will derive less satisfaction from each successive unit of the product consumed.
What is the law of diminishing marginal utility?
300
Preferences, income, number of buyers, price of related goods, and consumer expectations.
What are the non-price determinants of demand?
300
A physical establishment- a factory, farm, mine, store, or warehouse- that performs one or more functions in fabricating and distributing goods and services.
What is a plant?
300
The price-elasticity formula.
What is % change in quantity demanded ÷ % change in price?
300
A tax whose average rate increases as income increases.
What is a progressive tax?
400
This effect suggests that at a lower price buyers have the incentive to substitute what is now a less expensive product for similar products that are now relatively more expensive.
What is the substitution effect?
400
As price rises, the quantity supplied rises; as price falls, the quantity supplied falls.
What is the law of supply?
400
This indicates how the nation's earned income is apportioned among wages, rents, interest, and profits.
What is the functional distribution of income?
400
This measures how sensitive consumer purchases of one product are to a change in the price of some other product.
What is the cross elasticity of demand?
400
The idea that government is not needed to remedy spillover costs or benefits where property ownership is clearly defined, the number of people involved is small, and bargaining costs are negligable.
What is Coase theorem?
500
Graphically, the intersection of the supply curve and the demand curve for a product indicates this.
What is the market equlibrium?
500
This exists when the demand for a good or service exceeds the supply of the good or service.
What is a shortage?
500
These are shares of ownership of a corporation.
What are stocks?
500
The midpoint formula for the price elasticity of demand coefficient.
What is (change in quantity ÷ (sum of quantities ÷ 2)) ÷ (change in price ÷ (sum of prices ÷ 2))?
500
This model suggests that, under majority rule and consistant voting preferences, the average or moderate voter will in a sense determine the the outcomes of elections.