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Tong Microeconomics
Tong AP Microeconomics Summer Courtney
| Question | Answer |
|---|---|
| Scarcity | The issue in which unlimited demands exceed the limited resources available to fulfill those demands |
| Market | A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade |
| Opportunity Cost | The highest-valued alternative that must be given up to engage in an activity. The cost of what your giving up to get something else. |
| Goods | Tangible merchandise that is sold. Can be things such as T.VS, clothes, and CDS. |
| Services | Activities done for others for a cost. Services include things such as lawn care or financial advice. |
| Profit | The difference between a firm's revenue and it's costs |
| Capital | Financial capital: Stocks, bonds issued by firms, bank accounts and shares of money. Physical: Manufactured goods that are used to produce other goods and services for example computers, factory buildings, warehouses and trucks |
| Supply | The amount of a good or service. The law of supply is that the quantity supplied will increase as the price increases. The amount supplied depends on the market price (amount demanded and what suppliers are willing to produce) |
| Demand | The amount of a good or service that consumers want and are able to buy. |
| Competition | Firms competing against each other to sell a good or service. The more competition the more likely it is for firms to be efficient and for prices to be low. |
| Consumers | Individuals or households that buy goods or services |
| Budget | Annual procedure to determine how much public spending there should be in the year ahead and what mix of taxation, charging for services and borrowing should finance it. |
| Needs | Goods or services for a consumer in order to survive. Needs include food, housing and clothing. |
| Wants | Goods or services desired by consumers that consumers don't actually need in order to survive. They are discretionary expenses. Consumer wants are the driving force for demands on goods and services. |
| Cost | Value of money that has been used to produce a good or service. Cost can be a metric that is adding up as a result of a process. It can also be from the differential of a decision. |
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