the amount of money that must be paid for a unit of output

the good or service and/or the amount of it sold

those people in a market who want to exchange money for goods or services

those people in a market who want to exchange goods or services for money

What is Equilibrium Price?

The equilibrium price is the price at which the quantity of a good or service supplied equals the quantity demanded, creating a stable market with no surplus or shortage.

In economics, "surplus" generally means there is more of something than is needed, which can refer to excess supply, a budget surplus, or consumer and producer surplus.

a state or situation in which something needed cannot be obtained in sufficient amounts.

What is Quantity Supplied?

Quantity supplied is the specific amount of a good or service that producers are willing and able to sell at a given price during a specific time period. It is a single point on the <a target="_blank" rel="noopener noreferrer nofollow" class="DTlJ6d" style="text-decoration: underline; cursor: pointer;" href="https://www.google.com/search?sca_esv=e56551571a6f13fc&sxsrf=AE3TifOVnpLHLYwlVL-BpUAiQFSoACtsqA%3A1761343431050&q=supply+curve&sa=X&ved=2ahUKEwiW5KPM672QAxUEKEQIHYdwB-IQxccNegQIOBAB&mstk=AUtExfD7PCjuVFItbgH2TDoYw-g3ntxtdVLPiT3AH0Ty_izhoct8wlxixj6c801T8KzJeGqK_lWQAs1oVKL0NJDp2ANVkjYrUoLBHHiYYL3VLBma5JB5gt3487aM27-YHI3PJHjLDFMmyP20M8bHDnUnkVBmGO9V77G2_bti5tiUtAPx4IIfmTtTuXow45kH1CIGgyaNL1B2DsmlfR6ylWC_GMToyO6eY5jl3BELf_8BZoJw9NyBBy3CJMDl8Xt4lnKHkCsEAPzSr9k1GSu9zIAp2Z3m&csui=3">supply curve and represents the relationship between price and the quantity a seller is prepared to provide. A change in price causes a change in the quantity supplied, but it is not the same as a shift in supply.

What is Quantity demanded?

how much consumers are willing and able to buy at a particular price during a specific period of time

Capitalism is an economic system where private individuals or businesses own the means of production and operate them for profit

In economics, socialism is a system where the means of production, distribution, and exchange are owned or controlled by the community as a whole, often through the government. The goal is to create a more equal society by ensuring the equitable distribution of wealth and resources, and it stands in contrast to capitalism's emphasis on private ownership and free markets. Socialism can range from government intervention in a mixed economy to the state having significant control over all economic activity.

What does Ceteris Paribus mean?

In economics, ceteris paribus is a Latin phrase meaning "all other things being equal" or "holding all other factors constant". It is a fundamental assumption that allows economists to analyze the relationship between two variables in isolation by assuming that all other influencing factors remain unchanged

Demand is the relationship between price and quantity demanded, ceteris paribus

Supply is the relationship between price and quantity supplied, ceteris paribus

What is the real balances effect?

The real balances effect is defined as the change in consumer spending and aggregate demand that occurs when a change in the price level affects the real value of money balances people hold. When the price level falls, the purchasing power of money increases, making consumers feel wealthier and leading them to spend more. Conversely, when the price level rises, consumers' purchasing power decreases, leading them to spend less.

What is the law of diminishing marginal utility?

The law of diminishing marginal utility is the amount of additional happiness that you get from an additional unit of consumption falls with each additional unit

What is the law of supply?

The law of supply: the statement that there is a positive relationship between price and quantity supplied

What are Excise Taxes?

An excise tax is an indirect tax levied by a government on the manufacture, sale, or consumption of specific goods, services, and activities . Unlike a general sales tax, it is not applied broadly but targets a narrow range of products, such as fuel, tobacco, and alcohol

What are the 5 shifters of Demand?

Preferences, Number of Buyers, Price of related goods, income and expectations

What are the 5 shifters of supply?

Price of resources. Technology, Government involvement, Number of sellers and Expectations

What are Normal Goods?

In economics, a normal good is a product or service for which demand increases as a consumer's income rises, and decreases as income falls

What are Inferior Goods?

An inferior good is a product that sees a decrease in demand as a consumer's income increases, because people tend to switch to more expensive, preferred alternatives. These are goods that consumers buy out of necessity when budgets are tight, but which they stop buying once they can afford something better. Examples include generic brands, public transportation, and budget fast food.

What is a Complement in Economics?

In economics, a complement is a good or service that is used or consumed with another good or service, meaning the demand for one is linked to the demand for the other

What is a Substitute?

In economics, a substitute is a good or service that consumers can use in place of another to satisfy the same need or desire. For example, Coke and Pepsi are substitutes because a consumer can choose one over the other to quench their thirst. When the price of one substitute, like Coke, increases, the demand for the other substitute, Pepsi, is likely to increase as well, as consumers switch to the more affordable option

In economics, a subsidy is a financial payment or other form of support from the government to individuals, businesses, or industries to lower costs and promote specific economic activities

What is Perfect Competition?

Perfect competition is a theoretical market structure with many firms selling an identical product, no barriers to entry or exit, and perfect information for both buyers and sellers

In economics, a monopoly is a market structure where a single seller or company dominates the entire market for a product or service that has no close substitutes

What is Monopolistic Competition?

Monopolistic competition is a market structure with many firms selling similar but differentiated products, like restaurants or clothing stores

What is an Oligopoly?

An oligopoly is a market situation where a small number of large companies dominate the industry, limiting competition

Is Perfect Competition Common?

No, Perfect competition is rare outside agriculture, though it fits some labor markets

What are concentration ratios?

A concentration ratio is a measure of market structure that quantifies the combined market share of the largest firms in an industry, such as the top 4 or 8 companies

What is Normal Profit?

the level of profit that business owners could get in their next best alternative investment

What is Economic Profit?

Any profit above normal profit.

the period of time during which we cannot change things like plant and equipment

the period of time during which we can change things like plant and equipment

What is Microeconomics?

that part of the discipline of economics that deals with individual markets and firms

What is Macroeconomics?

the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

What is the Gross Domestic Product?

the dollar value of all of the goods and services produced for final sale in the United States in a year.

What does Final Sale avoid?

double-counting of intermediate production

Do Illegal Drug Sales count into the GDP?

NO, It isn’t because they shouldn’t be counted. Only record sales that are part of the system of business reporting to the state and federal governments count

What is a market basket?

goods that average people buy, and the quantities they buy them in.

Economics Midterm Flashcards Flashcards

Student preview

118 questions

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1.

FLASHCARD QUESTION

Front

At its core, What is Economics?

Back

Decision Making

2.

FLASHCARD QUESTION

Front

What is Opportunity Cost?

Back

the loss of potential gain from other alternatives when one alternative is chosen

3.

FLASHCARD QUESTION

Front

What is the Circular Flow Model?

Back

The circular flow model is an economic concept that illustrates the continuous flow of money, goods, and services between households and firms

4.

FLASHCARD QUESTION

Front

What is a Market?

Back

Any mechanism by which buyers and sellers negotiate an exchange

5.

FLASHCARD QUESTION

Front

What is a Factor Market?

Back

a mechanism by which buyers and sellers of labor and financial capital negotiate an exchange

6.

FLASHCARD QUESTION

Front

What is a Foreign Exchange Market?

Back

a mechanism by which buyers and sellers of the currencies of various countries negotiate and exchange

7.

FLASHCARD QUESTION

Front

Who are the actors in a circular flow model?

Back

Households

Firms

Governments

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