Basics Flashcards Preview

Economics > Basics > Flashcards

Flashcards in Basics Deck (22)
Loading flashcards...
1

Monopoly

One firm dominates market

2

Duopoly

2 firms dominate market

3

Oligopoly

Few markets dominant

4

Market

Exists when buyers and sellers exchange goods, services and resources

5

Characteristics of market

Buyers, sellers, something to exchange (voluntarily)

6

Demand

The consumers' buying intentions for a product

7

Law of demand

A negative relationship between price and quantity, as price rises people buy less

8

Ceteris paribus

Holding other factors constant; the hypothesis is valid as long as other factors remain the same

9

Income effect

When a price of a good rises, consumers are less willing to buy due to decreased real income/purchasing power

10

Substitution effect

When price of a good increases, other goods look more attractive due to being comparatively cheaper

11

Non price factors affecting demand

Levels of disposable income, price of related goods, tastes/preferences, expectations of consumers, demographic factors

12

Supply

The amount of a good or service that producers are willing and able to sell at a particular price at a particular time

13

Non price factors affecting supply

Costs of production, prices of other goods, technology, expectations of producers

14

Price in relation to supply/demand curve

A movement along curve

15

Non price factor in relation to supply/demand curve

Shift of curve

16

Which direction would the curve shift?

right for increase, left for decrease

17

Surplus

Caused when there is too much of a product

18

Positive statement

Tested objectively, quantified and analysed, not based on value judgement

19

Normative statements

Untestable, no hard facts or figures, based on value judgements or assumptions

20

Microeconomics

Economic problem on an individual level

21

Macroeconomics

The economic performance as a whole on a societal level

22

Which economic question is the distributive function?

For whom