Intro Stuff
_____ is the fact that there are limitless wants, but only so many resources to satisfy them.
Scarcity
What is the law of demand?
As the price or something increases, the quantity demanded goes down.
What is the law of supply?
It is that as the price of a good increases, more of it is made.
What is a sole proprietorship
A business fully owned by one person.
The place on a supply and demand graph where the two curves meet is called the _____.
What is opportunity cost?
The value of something that you give up to do something else. Example: spending money on a new iPhone instead of buying Beyonce tickets.
The chart that shows us what number of a good is demanded compared to the price, is a _____.
Demand schedule
_____ refers to the number of units of a good that are produced as a specific price.
quantity supplied
What is a difference between a sole proprietorship and a corporation?
One owner as opposed to many, limited liability, double taxation.
A cost that does not change, regardless of how much is produced, is _____.
a fixed cost
What does the word "marginal" mean?
It means "additional;" more specifically, it means the extra for one more of something. Example: marginal cost is the cost of producing ONE MORE item.
What is a "neutral good?"
It is something that no matter how much income rises or falls, the quantity demanded stays the same. Your water bill, would be an example.
If the whole supply graph shifts to the right, what is this called?
An increase in supply.
What is an advantage of a partnership over a sole proprietorship?
specialization of labor, more money to invest
To calculate total cost, what two variables do you need to know?
Fixed costs and variable costs.
What is the difference between MICRO-economics and MACRO-economics?
Microeconomics is concerned with the decisions made by individual actors - think of yourself, your family, a business. Macroeconomics is the study of an entire economy (like that of the USA), measuring it, and figuring out policies for its success.
Tennis rackets and tennis balls are an example of _____, meaning that as the demand goes up for one, the other increases in demand too.
Complementary goods
What are some factors that would move the supply graph?
Advances in new technology, taxes, quotas and subsidies
What does it mean when a corporation has limited liability?
It means that the shareholders do not have to pay for the debts and costs of the company - they won't go bankrupt if the corporation fails.
Labor is an example of a _____.
Variable cost.
What is the difference between a good and a service?
A good is something tangible, that you can hold or touch. Oil, a hoodie from H&M, your iPhone. A service in INTANGIBLE - this means that you cannot hold or touch it, but it exists as the product of your labor. Being a barber, or me teaching, is an example.
_____ demand means that the quantity demanded changes by a greater percentage when compared to the price. Think: the price goes up 5%, but the quantity demanded goes up by 20%
Elastic
Inelastic supply is...
when the quantity supplied changes more than the price (20% to 5%, respectively)
Revenues - costs = _____
Profit
If the market for a good is dominated by a few big companies that make it hard for other firms to join in and compete is called a(n) _____.
Oligopolistic market, or an oligopoly.