Unit 2 Microeconomics

Front

Represents how goods, services, and money move through our economy.

Back

Circular Flow Diagram

Front

The arena of exchange in which firms purchase the factors of production from households.

Back

Factor Market

Front

The arena of exchange in which households purchase goods and services from firms.

Back

Product Market

Front

Consumers will buy more of a good when its price is lower and less when its price is higher.

Back

Law of Demand

Front

Producers offer more of a good or service as its prices increases and less as its price falls.

Back

Law of Supply

Front

The point at which the quantity demanded for a product or service is equal to the quantity supplied of that product or service.

Back

Equilibrium

Front

A minimum price consumers are required to pay for a good or service. (Hint: this causes a surplus)

Back

Price Floor

Front

A maximum price consumers are required to pay for a good or service. (hint: this causes a shortage)

Back

Price Ceiling

Front

A business owned and managed by a single individual.

Back

Sole Proprietorship

Front

Business organization owned by two or more persons who agree on a specific division of responsibilities and profits.

Back

Partnership