Chapter 1
Desires that can be satisfied by consuming a good or a service
Wants
term used to describe how a nation is organized for production
economic system
form of corporate ownership without vote, in which stockholders get their investments back before common stockholders
preferred stock
in what direction is the demand curve ALWAYS sloping?
downward
a tax on the manufactore or sale of a good
Excise tax
Something essential for survival.
Need
simplified pictures of reality
models
stock of finished goods and parts held in reserve
inventory
graph showing the quantity demanded at each and every price at a given time
demand curve
the amount by which the quantity DEMANDED is higher than the quantity SUPPLIED
shortage
the principle that limited amounts of goods and services are available to meet unlimited wants.
Scarcity
the means of production are privately owned
capitalism
requirement that an owner is personally and fully responsible for all losses and debts of the business
Unlimited liability
area of economics that deals with behavior and decision making of small units
microeconomics
a factor other than price that can cause a change in supply of a good or service
supply shifters
a situation in which consumers want more of a good or service than producers are willing to make available at a particular price
shortage
other businesses selling same items or services
competitors
form of partnership where one or more partners are not active in the daily running of the business and have limited responsibility
Limited partnership
the extra usefulness or satisfaction a person gets from acquiring or using one more unit of a product
marginal utility
a minimum price set by the government to prevent prices from going too low
price floor
the human-made objects used to create other goods and services
physical capital
what kind of economic system does U.S. have?
90 % market economy and 10% command economy
business owned and run by a single person who has the rights to all profits and unlimited liability for all debts of the firm
Sole proprietorship or proprietorship
what would decreasing the price of a product cause?
change in demand
the point at which the quantity of a product demanded by consumers in a market equals the quantity supplied by producers
Market equilibrium