microeconomics study guide

Market

________: A place that allows buyers and sellers to come together.

Diamonds

________ have a higher marginal utility.

Behavioral economics

________: psychological /emotional effect on people as they make money decisions.

Market Demand

: the demand for a given product and who wants to purchase it.

Pure Competition

: large number or firms producing a product (easy for new firms to enter)

Pure monopoly

: market where one firm is the sole seller of a products and or service (easy to control the price)

human organs

Supply and Demand (________) demand for ________ is high and supply for ________ is low.

Price Elasticity

: the response of consumers to a price change.

Law of Supply

: the availability of a product that producers are willing to make at a given price.

Market

A place that allows buyers and sellers to come together

Law of Demand

the willingness of consumers to buy a product at a specific cost

Law of Supply

the availability of a product that producers are willing to make at a given price

Equilibrium Price/Quantity

the price/quantity where the intentions of buyers and sellers match

Surplus

too much supply

Shortage

too much demand

Price Ceilings

sets a maximum price

Price Floor

sets a minimum price

Utility

 the want and/or satisfied power of a product or service (satisfaction or pleasure one gets from consuming)

Fixed Cost

costs that do not vary with changes in output

Variable Cost

cost that changes with the level of output

Total Cost

total fixed costs + total variable costs = total cost

Pure Competition

large number or firms producing a product (easy for new firms to enter)

Pure monopoly

 market where one firm is the sole seller of a products and or service (easy to control the price)

Changes in Demand

tastes, number of buyers, income, prices of related goods, consumer expectations

Example

  Apple vs Samsung

Example

  super bowl tickets

Example

Nike vs Under Armor, similar products but ones on sale

Example

  coffee, expect to have it in the morning

Changes in Supply

resource prices, technology, taxes and subsides, price of other goods, producer expectations, number of sellers

Example

  microchips made of metals (price of copper)

Example

  cell phone service areas

Example

  alcohol taxes

Example

playing hockey, expensive

Example

lumber

Diamonds vs. Water

Diamonds have HIGHER marginal utility, water has HIGHER total utility, MARGINAL UTILITY has higher impact on price

rational economics

assume people always make the decision that makes them the most money

behavioral economics

psychological/emotional effect on people as they make money decisions

Individual demand

the demand for a good/service for an individual

cons

make more expensive (only rich would have access)

Four types of market structures

pure competition (large number of firms producing a product), pure monopoly (market where one firm is the sole seller of a product and or service), monopolistic competition (in between, competition), oligopoly (cereal, general mills vs kellogs)

Boy or girl/why baby-boomers

male entrepreneurs have outnumber female entrepreneurs 2 to 1. entrepreneurship is the new mid life crisis, longer life spans

monopolistic competition

in between, competition

oligopoly

cereal, general mills vs kellogs