Circular Flow
In a circular flow diagram, it's the part of the economy that produces goods and services.
What are businesses?
According to this economic law, consumers will buy more when prices are lower and buy less when prices are higher.
What is the Law of Demand?
Can be caused by changes in the prices of related goods, income, tastes, expectations, or number of consumers
What is a shift in the demand curve?
Unlimited number of firms, no barriers to entry, no influence over price and product is identical to other producers
What is perfect competition?
One of the advantages of this type of business organization is limited liability.
What is a corporation?
In the circular flow diagram, businesses receive money payments from households via the______ market.
What is product?
On a demand curve, when price changes this also changes.
What is quantity demanded?
Can be caused by changes in input prices, the price of related goods or services, technology, expectations, the number of producers.
What are shifts in the supply curve?
A market dominated by a few sellers who compete fiercely with each other, but often "gang up" to prevent new sellers from entering the market.
What is an oligopoly?
One owner, very easy to set up, limited ability to raise capital
What is a sole proprietorship?
In this market businesses acquire the resources needed to produce goods and services.
What are factor markets?
Its downward slope is the result of the inverse relationship between price and quantity.
What is the demand curve?
Any decrease in supply or demand is a shift in this direction.
What is leftward?
Companies in this market rely on branding and advertising to distinguish themselves from their competitors.
What is monopolistic competition?
Profits are shared among the owners.
What is a partnership?
The government provides these to households and businesses.
What are public goods and services?
According to this economic law, producers are willing to sell more at higher prices and sell less at lower prices.
What is the Law of Supply?
Any increase in supply or demand is a shift in this direction.
What is rightward?
As the only company in an industry, it has an incredible amount of control over prices.
What is a monopoly?
About 70% of businesses in the US are this type.
What is a sole proprietorship?
In this role, money can be anything that buyers and sellers in an economy are willing to accept as payment.
What is medium of exchange?
When the quantity demanded of a good equals the quantity supplied of that good.
What is equilibrium?
When supply decreases, equilibrium price ____ equilibrium quantity _____?
What are increases/decreases?
Firms in a perfectly competitive market are known as these because they can sell only at the price that has been set by supply and demand.
What are price takers?
A situation in which the owner is personally liable for the businesses debts.
What is unlimited liability?