Microeconomics
What is the basic economic concept in microeconomics?
Supply and Demand
What is supply?
The amount of something produced, grown, or offered at sale.
How do we change the quantity demanded?
Change the price
What is a partnership?
In a perfectly competitive market, what dictates the price?
Supply and demand
What is studied in microeconomics?
The economic decisions of businesses and individuals.
Why is a supply curve upward sloping?
When the price goes up, so does the quantity supplied.
What is the substitution effect?
The demand for another product shifts based on a change in price to a substitute good.
What does it mean to have unlimited liability?
You are responsible for all the debts of the business and therefore stand to lose everything if the business fails.
What does it mean to have a monopoly?
Firm owns all of the market for that good or service.
The circular flow model is used to explain what relationship?
The relationship between households, businesses, and the markets they buy off of.
How would new producers entering the market shift the supply curve?
It would shift to the right as supply goes up.
What is a complimentary good?
A good that its use compliments or goes with another product.
What is a barrier to entry?
Something that makes it harder for a business to enter the market for a certain good.
The airline industry is dominated by a few large sellers. What market structure would this be?
Oligopoly
Who buys off of the product market?
Households and individuals
How do we change the quantity supplied?
Change the price
What determines the elasticity of demand?
Whether or not the purchase can be delayed, how necessary it is, etc.
What is a corporation?
A large business that is owned by stockholders and shareholder.
What is a geographic monopoly?
One that has a monopoly due to it being the only location to get something in an area.
Who buys off of the factor market?
Businesses
The measure to the degree to which quantity supplied responds quickly to the change in price is known as what?
Supply elasticity
What occurs when the government sets a price floor?
Mr. Richtmyer has decided to quit his job and open up his own chicken finger and fries (his favorite meal) food truck. What kind of business is this?
Sole proprietorship
What is the difference between perfect competition and monopolistic competition?
Monopolistically competitive firms have similar, but not identical products.