Unit 2 Microeconomics

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

• Circular Flow Diagram

• Supply Curve

• Demand Curve

• Supply and Demand Curve

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

• Product Market

• Factor Market

• Price Floor

• Circular Flow

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

• Factor Market

• Supply Curve

• Product Market

• Circular Flow

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

• Law of Demand

• Law of Supply

• Price Floor

• Price Ceiling

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

• Law of Demand

• Law of Supply

• Price Floor

• Price Ceiling

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

• Equilibrium

• Price Stability

• Shortage

• Supply

A minimum price consumers are required to pay for a good or service.

• Price Ceiling

• Market Clearing Price

• Equilibrium

• Price Floor

A maximum price consumers are required to pay for a good or service.

• Price Ceiling

• Equilibrium

• Market Clearing Price

• Price Floor

A business owned and managed by a single individual.

• Partnership

• Corporation

• Sole Proprietorship

• Limited Partnership

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

• Partnership

• Coperation

• Sole Proprietorship

• Monopoly