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Related Flashcards
Cards In This Set
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Definition of microeconomics?
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The study of individual units in an economy (households, firms, markets) and their relationships. Also the study of allocation of resources and distribution of income
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Definition of equilibrium?
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State of rest with no tendency to change given existing forces
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Definition of partial equilibrium analyiss?
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Analysis of the relationship between two variables while holing other variables constant, ceteris paribus
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Definition of general equilibrium analysis?
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Analysis of relationship between all variables simultaneously
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Definition of aotmism?
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Position that society (whole) is the sum of its parts (households and firms)
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What is market demand?
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The sum of all individual (household) emand functions
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What is market supply?
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Sum of all individual (firm) supply functions
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Definition of market system:
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Purchase and sale transactions between economic actors (households and firms) determine allocation of resources in market - price mechanism determines allocation of resources
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What are the five ways government affect allocation of resources in market economies?
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- Government spending- Taxation- Public enterprise- Regulation- Monetary Policy
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Definition of competitive markets:
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Competition is price taking
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What is imperfect competition? What is the most extreme form?
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When buyers/sellers can influence price; most extreme form is monopoly (single seller) and monopsony (single buyer)
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Definition of demand:
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Quantities of goods/services demanded by consumers (households) at each market price ceteris paribus
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Variables of demand are:
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Price, quantity demanded, and prices of other goods
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Demand is analyse as a _____ response to _______
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Quantity response to price
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Law of demand:
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Quantity demanded is inversely related to price.
(Change in Q/Change in P < 0) |
