3355903
Description
Flashcards by randi120497, updated more than 1 year ago
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Created by randi120497
about 9 years ago
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| Question | Answer |
| 1. Market | The place where consumers and producers comes together to make business flow |
| 2. Demand | The wants by consumers |
| Law of Demand | states that other factors being constant (cetris peribus), price and quantity demand of any good and service are inversely related to each other. |
| Supply | Object made by the producer to sell |
| Law of supply | fundamental principle of economic theory which states that, all else equal, an increase in price results in an increase in quantity supplied. |
| Equilibrium Price | The equal balance price between the producer and consumer for the product |
| Price Ceiling | government controlled price on a product |
| Price Floor | government- or group-imposed price control or limit on how low a price can be charged for a product |
| 1. Price Elasticity of Demand | The degree to which the quantity demanded for a good changes in response to a change in price can be influenced by a number of factors. |
| Elastic Demand | shows the response of economic growth with the product given |
| Cross elasticity of Demand | measures the responsiveness of the demand for a good to a change in the price of another good |
| Substitute Goods | 2 goods that can be used for the same person |
| Complement Goods | 2 goods that go well with each other |
| Income elasticity of Demand | measures the responsiveness of the demand for a good to a change in the income of the people demanding the good, ceteris paribus |
| Normal Goods | any good that which demand increase when income increases. |
| Inferior Goods | a good that decreases when income increases. |
| Price Elasticity of Supply | measure used in economics to show the responsiveness, or elasticity, of the quantity supplied of a good or service to a change in its price |
| Market Failure | when the market of growth fails |
| Positive externalities | Benefit enjoyed by a third party in the PPC |
| Negative Externalities | when ones does not benefit from the PPC |
| Public goods. | product that one individual can consume without reducing its availability to another individual |
| Merit goods | the government feels that people will under-consume |
| Demeirt Goods | good or service whose consumption is considered unhealthy, degrading, or otherwise socially undesirable |
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