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MILESTONE REVIEW
Microeconomic Concepts
Question | Answer |
---|---|
Microeconomics | The study of individuals, households and firms' behavior in decision making and allocation of resources. |
Expenditures | The total amount of money that a government, organization, or person spends during a particular period of time. |
Barter | Trade |
Product Market | Where money is exchanged for goods and services. |
Revenue | The amount of money that a company actually receives during a specific period. |
Law of Demand | Quantity purchased varies inversely with price. |
Law of Supply | Price and quantity supplied of a good are directly related to each other. |
Shortage | Situation in which demand for a good or service exceeds the available supply. |
Surplus | Situation in which demand for a good or service is less than the supply that's available. |
Price Floor | Used by the government to prevent prices from being too low. A common example is minimum wage. |
Price Ceiling | A government-imposed price control, or limit, on how high a price is charged for a product. |
Limited Liability | Type of liability given to a corporation because only the business can be sued, not the owner's personal assets. |
Unlimited Liability | Type of liability given to a sole proprietorship and partnership because the owner as well as the business can be sued. |
Dividends | A distribution of a portion of a company's earnings, decided by the board of directors, paid to a class of its shareholders. |
Monopoly | A market structure characterized by a single seller, selling a unique product in the market. |
Oligopoloy | A market structure in which a few firms dominate. |
Monopolistic Competition | Many producers sell products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. |