Economic Questions, Structures, and Market Competition

Flashcards covering the three basic economic questions, economic systems (mixed, market, command, traditional), and competition market structures (monopoly, monopolistic competition, oligopolistic competition, perfect competition).

What are the three main economic questions?

1. What should we make? (Consumption)
2. How do we make it? (Production)
3. For whom do we make it? (Distribution)

How is a mixed economy described?

A mix between a command economy and a market economy.

How is a market economy defined?

The government does not control the economy at all, and economic activity is based on supply and demand.

How is a market economy defined?

The government does not control the economy at all, and economic activity is based on supply and demand.

How is a traditional economic structure defined?

An economy based on beliefs and values, where goods and services are developed based on how people live.

What defines a monopoly in market structures?

A single company represents all or nearly all of an industry.

What is monopolistic competition?

Many companies compete to sell similar but differentiated products.

What characterizes oligopolistic competition?

A small number of large companies work together to maintain dominance.

What defines perfect competition?

A large number of small, very similar companies where prices are beyond the control of buyers and sellers.

Explain why the supply curve is always positive:

Because the more the price increases, the more companies will want to increase your quantity, which helps them make more money.