Economics: Market Structures, Supply and Demand, and Economic Systems

Vocabulary practice flashcards covering fundamental economic concepts, economic indicators, comparative economic systems, supply and demand mechanics, and the four degrees of market competition.

Economics

The study of how society chooses to employ resources to produce goods and services and distribute them for consumption.

Gross Domestic Product (GDP)

A key economic indicator representing the total goods and services produced by the economy.

Unemployment Rate

A key economic indicator defined as the percentage of the workforce actively seeking, but unable to find work.

Inflation Rate

A key economic indicator defined as the general rise in prices for goods and services.

Market Economy

An economic system whose benefits include innovation and consumer sovereignty, but whose limitations include inequality and potential market failures.

Command Economy

An economic system whose benefits include a focus on income distribution, but whose limitations include a lack of efficiency and individual freedom.

Traditional Economy

An economic system whose benefits include stability and cultural continuity.

Supply

The quantity of products manufacturers are willing to sell at different prices; as prices increase, suppliers are incentivized to produce more.

Demand

The quantity of products consumers are willing to buy at different prices; as prices decrease, consumers demand more.

Equilibrium Point

The place or price where quantity demanded and quantity supplied meet, which determines the market price.

Market Price

The long-run price determined by the interaction of supply and demand.

Perfect Competition

A degree of competition that exists when there are many sellers in a market and no seller is large enough to dictate the price of a product (e.g., agricultural products like apples, corn, and potatoes).

Monopolistic Competition

A degree of competition that exists when a large number of sellers produce goods that are very similar but are perceived by buyers as different (e.g., personal computers, candy, and T-shirts).

Oligopoly

A market condition occurring when a few sellers dominate a market, seen in industries such as oil and gas, tobacco, automobiles, aluminum, and aircraft.

Monopoly

A market condition that occurs when one seller dominates the market (only one seller for a good or service) and holds the vast majority of the market, giving them significant market power.

Modern Mixed Economy of Canada

An economic system that functions as a hybrid of market and command economy characteristics, balancing government involvement (such as in healthcare, education, and business regulation) with market forces where groups lobby to relax regulations.