Shared Flashcard Set

Details

Economics Test 4
Jake Mendelssohn's Class
32
Economics
12th Grade
01/15/2013

Additional Economics Flashcards

 


 

Cards

Term
Market?
Definition
the gathering of people for the purchasing and selling of goods and services
Term
Demand?
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.
Term
Law of Demand?
Definition
states that all other things being equal, price and quantity demand are inversely related. Meaning when price goes up .. quantity goes down.
Term
Causes of Change in Demand?
Definition
change in income, change in style/taste, and change in price for substitute products.
Term
How can Culture and Advertising affect demand?
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.
Term
Causes of Demand Curve to Increase/ Decrease?
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.
Term
Supply?
Definition
quantities of a good or service that people are willing and able to sell at different prices
Term
Law of Supply?
Definition
states that all other things being equal, price and quantity supply are directly related.
Term
Two reasons that quantity produces will increase as the price increases
Definition
Demand increase so they have to produce more of the product which mean they have to pay more.
Term
Price Ceiling
Definition
a set price of a product below the equilibrium that keeps the price from going too high
Term
Price Floor?
Definition
a set price of a product above the equilibrium that keeps prices from going too low
Term
Utility?
Definition
total satisfaction received from consuming a good or service.
Term
Factors that create Utility?
Definition
style, satisfaction, hunger, income
Term
Marginal Utility?
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
Term
Law of Diminishing Marginal Utility?
Definition
The more of an item you have, the less satisfaction you get from it. (you can use the same example from marginal utility)
Term
Total Utility?
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
Term
Surplus?
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
Term
What determines the price of a product in the Free Market?
Definition
how much people are willing to buy for it
Term
Fixed Cost?
Definition
A cost that does not change with an increase or decrease in the amount of goods or services produced.
Example: Rent, insurance
Term
Variable Costs?
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
Term
Profit?
Definition
Profit is the money a business makes after accounting for all the expenses.
After paying fixed and variable costs.
Term
Difference between gross and net profit?
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.
Term
Can you plot a changed Demand Curve?
Definition
Yes, plot the line to the left or right of the original, depending on the increase or decrease of the new data.
Term
Can you plot a changed Supply Curve?
Definition
Yes, plot the line to the left or right of the original, depending on the increase or decrease of the new data.
Term
How can politics and taxation affect Supply?
Definition
Politicians will do anything to stay in office including "fix" tax rates.
Term
What type of event would cause a Supply Curve to increase? To decrease?
Definition
A war. Depression.
Term
Can you identify a Price Ceiling on a graph?
Definition
Yes, a price ceiling is the point below the equilibrium point.
Term
Could a firm that is "losing money" stay in business?
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.
Term
Could a firm that is "making a profit" have to go out of business?
Definition
Yes, if it doesn't have cash flow.
Term
Cash Flow?
Definition
The movement of money into and out of a business.
Term
What happens when a firm files for bankruptcy?
Definition
They find the least costly way to close up shop. So they may pay their debts.
Term
Difference between Short term and Long term profit?
Definition
Short term profit-Profit realized from assets held for 12 months or less. Long term profit-
Supporting users have an ad free experience!