Circular Flow
Define "revenue"
Money made by a business from selling a product
The law of demand says...
What do technological innovations always do to the market? Which graph represents that?
increase supply // (1)
This business organization puts the heaviest legal burdens on the owner
Sole Proprietorship
This market structure sells a unique good that no one can replicate
monopolies
What effect would a worker strike have on the circular flow?
It would immediately cut off resources from the businesses, and it could make the whole thing collapse
What's happening at equilibrium? how do businesses and consumers feel about this?
quantity supplied and quantity demanded are the same. businesses are happy because they are able to sell a product and make money. consumers are happy because they can buy a product at a reasonable price
A change in consumer income would have what effect on the market for groceries? Which graph is that?
increase demand // (3)
What are the two biggest drawbacks of having a partner?
splitting the money and disagreements
Food, clothes, and books represent items sold inside of this market structure
monopolistic competition
What is the role of households and businesses in the resource market?
Households sell resources; businesses buy resources
The law of supply says...
As the price of an item increases, the quantity businesses will supply of that item also increases (vice versa)
If a shoe warehouse is destroyed by a tornado, how will that likely affect the market? Which graph is that?
Supply decreases // (2)
What is the benefit of a business being able to offer and sell stock?
it's easier for them to raise capital
This market structure is the hardest to open a business in
monopolies
What is the role of households and businesses in the product market
households buy products; businesses sell products
What is happening to quantity supplied and quantity demanded at graph (A)? What does that create?
The quantity supplied is super high; the quantity demanded is super low. This creates a surplus
A guitar store offers its biggest sale of the year near Black Friday. Some guitars are marked 75% off. How does that affect the market? Which graph is that
demand increase // (3)
Which two business organizations have multiple owners?
Partnerships and corporations
This market structure has thousands of seller competing to sell an IDENTICAL good
pure competition
Explain the flow of money AND the flow of resources (ie, the outer and inner arrows)
Households buy products; businesses make money; businesses give wages; households earn income // households provide labor; businesses use that labor; businesses provide a product; households sell a product
What is happening to quantity supplied and quantity demanded at graph (B)? What does that create?
The qauntity supplied is super low and the quantity demanded is super high. This creates a shortage
If a magazine article praised cherries as a healthier alternative to grapes, this would have what affect on the market for grapes? Which graph is that?
demand decrease // (4)
What is unlimited liability and which two business organizations have to deal with it?
Unlimited liability means that the owner or owners of the businesses are responsible for all legal debts. Sole proprietors and partners
What type of market structure do Internet browsers represent?
oligopolies