Term
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Definition
| the gathering of people for the purchasing and selling of goods and services |
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Term
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Definition
| The amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. |
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Term
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Definition
| states that all other things being equal, price and quantity demand are inversely related. Meaning when price goes up .. quantity goes down. |
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Term
| Causes of Change in Demand? |
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Definition
| change in income, change in style/taste, and change in price for substitute products. |
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Term
| How can Culture and Advertising affect demand? |
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Definition
| there would be an increasing interest in one product over another product, therefore increasing demand... if something is not culturally acceptable, then there would be less of a demand on it. |
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Term
| Causes of Demand Curve to Increase/ Decrease? |
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Definition
| increased quantity causes increase in demand, decreased quantity causes decrease in demand, increase in income causes increase in demand, change in taste can increase or decrease demand. |
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Term
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Definition
| quantities of a good or service that people are willing and able to sell at different prices |
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Term
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Definition
| states that all other things being equal, price and quantity supply are directly related. |
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Term
| Two reasons that quantity produces will increase as the price increases |
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Definition
| Demand increase so they have to produce more of the product which mean they have to pay more. |
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Term
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Definition
| a set price of a product below the equilibrium that keeps the price from going too high |
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Term
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Definition
| a set price of a product above the equilibrium that keeps prices from going too low |
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Term
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Definition
| total satisfaction received from consuming a good or service. |
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Term
| Factors that create Utility? |
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Definition
| style, satisfaction, hunger, income |
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Term
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Definition
The additional satisfaction a consumer gains from consuming one more unit of a good or service
For example, if you were really thirsty you'd get a certain amount of satisfaction from a glass of water. This satisfaction would probably decrease with the second glass |
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Term
| Law of Diminishing Marginal Utility? |
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Definition
| The more of an item you have, the less satisfaction you get from it. (you can use the same example from marginal utility) |
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Term
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Definition
| The aggregate level of satisfaction or fulfillment that a consumer receives through the consumption of a specific good or service. Each individual unit of a good or service has its own marginal utility, and the total utility is simply the sum of all the marginal utilities of the individual units |
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Term
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Definition
A situation in which assets exceed liabilities, income exceeds expenditures, exports exceed imports, or profits exceed losses.
example: when a country exports more than it imports |
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Term
| What determines the price of a product in the Free Market? |
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Definition
| how much people are willing to buy for it |
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Term
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Definition
A cost that does not change with an increase or decrease in the amount of goods or services produced.
Example: Rent, insurance |
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Term
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Definition
Variable costs are those costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases.
Examples:Bills of Utilities, Raw Material |
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Term
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Definition
Profit is the money a business makes after accounting for all the expenses.
After paying fixed and variable costs. |
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Term
| Difference between gross and net profit? |
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Definition
| Fixed cost-variable cost=Gross profit, Gross profit –income tax= net profit. Gross profit is ur total profit while net profit is your profit after taxes. |
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Term
| Can you plot a changed Demand Curve? |
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Definition
| Yes, plot the line to the left or right of the original, depending on the increase or decrease of the new data. |
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Term
| Can you plot a changed Supply Curve? |
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Definition
| Yes, plot the line to the left or right of the original, depending on the increase or decrease of the new data. |
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Term
| How can politics and taxation affect Supply? |
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Definition
| Politicians will do anything to stay in office including "fix" tax rates. |
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Term
| What type of event would cause a Supply Curve to increase? To decrease? |
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Definition
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Term
| Can you identify a Price Ceiling on a graph? |
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Definition
| Yes, a price ceiling is the point below the equilibrium point. |
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Term
| Could a firm that is "losing money" stay in business? |
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Definition
| Yes, an example of this would be the railroads. They ask for loans from the government and pay them back asap. The government gets their money back + interest and the railroads stay in business. |
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Term
| Could a firm that is "making a profit" have to go out of business? |
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Definition
| Yes, if it doesn't have cash flow. |
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Term
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Definition
| The movement of money into and out of a business. |
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Term
| What happens when a firm files for bankruptcy? |
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Definition
| They find the least costly way to close up shop. So they may pay their debts. |
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Term
| Difference between Short term and Long term profit? |
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Definition
| Short term profit-Profit realized from assets held for 12 months or less. Long term profit- |
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