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Microeconomics Test Review

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  • a business that is owned and managed by a single individual
    sole proprietorship
  • Table that lists the quantity of a good that a person will purchase at each price in a market
    Individual demand schedule
  • simplifies the interactions of producers and consumers in the economy to help us visualize how producers and consumers interact in an economy
    Circular Flow Model
  • if someone believes that a good will be more expensive later, then
    current demand will probably increase
  • Makes high prices illegal
    price ceiling
  • Companies compete in a market to sell products that are similar, but not identical
    monopolistic competition
  • If a supplier leaves a product market, the supply curve will shift to the _________
    left
  • Willingness and ability to produce and sell a product at a certain price point
    Supply
  • The quantity supplied changes due to changes in the ___________
    price
  • a market dominated by 3-5 large, profitable firms
    oligopoly
  • Where one seller dominates the market
    monopoly
  • things that make it difficult for a new company to enter a market
    barrier to entry
  • Stock is bought and sold on the open market
    publicly held company
  • Market in which goods and services are bought and sold
    Product Market
  • The quantity (or number) of a product that consumers are willing to buy at a particular price
    quantity demanded
  • The study of people and businesses within a small market
    Microeconomics
  • The Law of Demand states that as prices increase, quantity demanded _______
    decreases
  • Goods that pair well with another good and can have their demand affected by that good
    complementary goods
  • price ceilings create
    excessive demand
  • product that is the same regardless of who makes or sells it
    commodity
  • Market in which productive resources (factors of production) are bought and sold
    Factor Market
  • a certificate of ownership in a corporation
    stock
  • Makes Low prices illegal
    price floor
  • Similar products that can take the place of an original product
    substitute product
  • when income increases, demand for _________________ increases
    normal goods
  • Decreases in demand shift the demand curve to the _______
    left
  • The Law of Supply states that as prices increase, quantity supplied _______
    increases
  • price floors create
    surpluses
  • Large number of firms that produce the same product
    pure/perfect competition
  • If a new company enters a product market, the supply curve will shift to the _________
    right
  • Price and quantity supplied have a __________  relationship
    positive/direct
  • a legal entity that is owned by stockholders
    corporation
  • The quantity demanded changes as a result of changes in the _________
    price
  • Price and demand have a _____________ relationship
    negative/inverse
  • when income increases, demand for _________________ decreases
    inferior products
  • In the Circular Flow Model, goods and services and money flow in _______ directions
    opposite
  • willingness and ability to buy a product creates ____________
    Demand
  • Keeping all things constant, except for price to examine the change
    Ceteris paribus
  • The most common type of business is a
    sole proprietorship
  • A shift to the right of a demand curve indicates ____________ in demand
    an increase
  • shows the quantities demanded at each price by all consumers in the market
    Market demand schedule
  • If something is believed to be going on sale at a later date, then _________________
    current demand will decrease.
  • oligopolies working together to form a monopoly
    collusion
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