BUSINESS ECONOMICS –Questions & Solutions
(100%)
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Terms in this set (300)
The study of how society manages its scarce
ECONOMICS
resources.
SCARCITY Of a limited nature (not enough for everyone)
Something that induces a person to act. A reason to
INCENTIVE
act.
OPPORTUNITY COST the cost of something is what you give up to get it
In economics, a margin is a set of constraints
conceptualised as a border. A marginal change is
the change associated with a relaxation or
MARGIN
tightening of constraints — either change of the
constraints, or a change in response to this change
of the constraints.
situation that involves losing one quality or aspect of
Trade Off something in return for gaining another quality or
aspect
Field in economics that deals with issues such as
Business economics business organization, management, expansion and
strategy.
A group of buyers and sellers of a particular good or
Market
service
(As a group) determine the demand of a product or
Buyers
service
(As a group) determine the supply of a product or
Sellers
service
, A market in which there are many buyers and
Competitive Market sellers so that each has a negligible impact on the
market place
Price takers accept whatever the market price
happens to be. They have no market power to
Price Takers charge a different price because its many free-entry
competitors are selling identical products. They face
a typically horizontal demand curve.
One entity controls all of a good or service in a
Monopoly
market
A relationship between market price and quantities
of goods and services purchased in a given period
of time
Demand
Represents the behavior of buyers in the market
place
The amount of a good that buyers are willing and
Quantity Demanded
able to purchase
A table that shows the relationship between the
Demand schedule
price of a good and the quantity demanded
The claim that, other things equal, the quantity
Law of Demand demanded of a good falls when the price of the
good rises
The relationship between price and quantity
demanded
Demand curve
A graph of the relationship between the price of a
good and the quantity demanded
The sum up of all the individual demands for a
Market Demand
particular good or service
A good for which, other things equal, an increase in
Normal good
income leads to an increase in demand
A good for which, other things equal, an increase in
Inferior Good
income leads to a decrease in demand
, Two goods for which an increase in the price of one
Substitutes
leads to an increase in the demand for the other
Two goods for which an increase in the price of one
Complements
leads to decrease in the demand for the other
Typically an inferior product that does not have
Giffen good easily available substitutes, as a result of which the
income effect dominates the substitution effect
Types of material commodities for which the
Veblen goods demand is proportional to its high price, which is an
apparent contradiction of the law of demand
A relationship between market price and quantities
of goods and services made available for sale in a
given period of time
Supply
Represents the behavior of sellers in the market
place
The amount of a good that sellers are willing and
Quantity Supplied
able to sell
The claim that, other things equal, the quantity
Law of supply supplied of a good rises when the price of the good
rises
A table that shows the relationship between the
Supply Schedule
price of a good and the quantity supplied
The relationship between price and quantity
supplied
Supply Curve
A graph of the relationship between the price of a
good and the quantity supplied
Market supply The sum up of all individual supplies
(100%)
Save
Terms in this set (300)
The study of how society manages its scarce
ECONOMICS
resources.
SCARCITY Of a limited nature (not enough for everyone)
Something that induces a person to act. A reason to
INCENTIVE
act.
OPPORTUNITY COST the cost of something is what you give up to get it
In economics, a margin is a set of constraints
conceptualised as a border. A marginal change is
the change associated with a relaxation or
MARGIN
tightening of constraints — either change of the
constraints, or a change in response to this change
of the constraints.
situation that involves losing one quality or aspect of
Trade Off something in return for gaining another quality or
aspect
Field in economics that deals with issues such as
Business economics business organization, management, expansion and
strategy.
A group of buyers and sellers of a particular good or
Market
service
(As a group) determine the demand of a product or
Buyers
service
(As a group) determine the supply of a product or
Sellers
service
, A market in which there are many buyers and
Competitive Market sellers so that each has a negligible impact on the
market place
Price takers accept whatever the market price
happens to be. They have no market power to
Price Takers charge a different price because its many free-entry
competitors are selling identical products. They face
a typically horizontal demand curve.
One entity controls all of a good or service in a
Monopoly
market
A relationship between market price and quantities
of goods and services purchased in a given period
of time
Demand
Represents the behavior of buyers in the market
place
The amount of a good that buyers are willing and
Quantity Demanded
able to purchase
A table that shows the relationship between the
Demand schedule
price of a good and the quantity demanded
The claim that, other things equal, the quantity
Law of Demand demanded of a good falls when the price of the
good rises
The relationship between price and quantity
demanded
Demand curve
A graph of the relationship between the price of a
good and the quantity demanded
The sum up of all the individual demands for a
Market Demand
particular good or service
A good for which, other things equal, an increase in
Normal good
income leads to an increase in demand
A good for which, other things equal, an increase in
Inferior Good
income leads to a decrease in demand
, Two goods for which an increase in the price of one
Substitutes
leads to an increase in the demand for the other
Two goods for which an increase in the price of one
Complements
leads to decrease in the demand for the other
Typically an inferior product that does not have
Giffen good easily available substitutes, as a result of which the
income effect dominates the substitution effect
Types of material commodities for which the
Veblen goods demand is proportional to its high price, which is an
apparent contradiction of the law of demand
A relationship between market price and quantities
of goods and services made available for sale in a
given period of time
Supply
Represents the behavior of sellers in the market
place
The amount of a good that sellers are willing and
Quantity Supplied
able to sell
The claim that, other things equal, the quantity
Law of supply supplied of a good rises when the price of the good
rises
A table that shows the relationship between the
Supply Schedule
price of a good and the quantity supplied
The relationship between price and quantity
supplied
Supply Curve
A graph of the relationship between the price of a
good and the quantity supplied
Market supply The sum up of all individual supplies
