EOCT economics terms – Flashcards
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buyer
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This is the person or persons who purchase a good or service.
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circular flow diagram
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This is the two sector economic model showing how firms, or businesses, and consumers, or households, interact.
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competition
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This is rivalry. In economics, competition may refer to rivaly among firms, or individuals or the competiton for resources.
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complementary product
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This is a physical item that has an increase in demand when the price of another item decreases in Economics.
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corporation
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A type of business organization where the business is recognized as a legal entity with the right to sell stock.
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demand
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This is the amount of a good or service that consumers are willing and able to buy at a given price at a given time.
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demand curve
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This is the graph that shows the relationship between the price of a good and the amount of it that buyers are willing to purchase at that price.
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demand elasticity
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This is the relationship between changes in the demand quantity of a good and the changes in its price.
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elastic
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This is when the demand for a product is highly responsive to changes in price.
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entrepreneur
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a person who takes the risk of a new business enterprise
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equilibrium price
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Determined by the intersection of the supply and demand curves on a graph
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factor market
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that part of the economy where labor and resources are sold
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households
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This is the section of the economy made up of individuals and/or families. It is one of the main sectors.
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incentive
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Any factor, usually financial, to influence one choice over another by an individual or business.
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inelastic
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This is when the demand of a product is weakly responsive to price changes.
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law of demand
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the rule stating that more of a product will be consumed at a lower price and less will be consumed at a higher price
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law of supply
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the rule which states that more of a product will be produced when the price is high and less will be produced when the price is low
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market
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This is the arrangement where buyers and sellers learn information from one another and voluntarily exchange goods, services and money.
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market structure
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This describes the state of a market with respect to competition.
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money
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This is the legally accepted payment for goods and services.
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monopolistic competition
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This is a market structure where there are many producers selling differentiated products (substitutes but are not exactly alike), no one firm has total control over price, there are few barriers to entry, but consumers feel there are non-price differences between the goods sold.
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monopoly
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This is when one company controls the market for a certain product, there is no competition.
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oligopoly
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This is a market where a few large suppliers control the supply of a product.
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partnership
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an unincorporated business owned and run by two or more people
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perfect competition
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This is a market form where no producer or consumer has the market power to influence prices. It is theoretical.
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price
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This is the monetary value assigned to a product or service.
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price ceiling
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maximum legal price that can be charged for a product
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price floor
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This is the lowest legal price that can be charged for a product.
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product market
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This is where goods and services are sold in the circular flow model of income in economic theory.
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profit
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the difference between revenue received and the cost of production
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profit motive
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In a market economy, this is the driving force that encourages individuals and organizations to improve their material well-being.
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resource market
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This is where labor and other factors of production are sold in the circular flow model of income in economic theory.
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resources
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These are the factors of production used in the making of goods and services.
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shortage
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the situation which exists when the quantity demanded is greater than the quantity supplied
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sole proprietorship
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This is an unincorporated business owned and run by one person.
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substitute product
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a product that a purchaser may use in place of another product; if the demand for one goes up the demand for the other usually goes down
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supply
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the amount of a good or service that producers are willing to produce at a given time
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supply curve
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This is a graphic representation of the quantity producers are willing to produce at different prices.
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supply elasticity
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This is the responsiveness of the distribution of a good to the amount charged for a good in Economics.
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surplus
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the situation that exists when the quantity supplied of an item is greater than the quantity demanded
