ECONOMICS UNIT 2
What is demand?
the ability and desire to purchase goods and services.
What happens to demand when prices increase?
can cause demand to fall.
What does a demand curve illustrate?
It shows quantity demanded at each price level.
What does the Law of Demand state?
As price increases, consumer demand for the good or service will decrease and vice versa.
What does inelastic demand mean?
a desire for a product or service that does not vary with increases or decreases in price.
What does a market supply curve show?
shows total number of goods that sellers want to sell at each possible price.
What was the impact of technology on the supply curve?
a graph depicting the proposed amount of a product as a function of its price
What are the four important measures of cost?
Lost time measurements and aggregate.
What is a fixed cost?
A cost that does not vary depending on production or sales levels.
What is a total cost?
a financial estimate designed to help consumers and enterprise managers assess direct/indirect cost.
Why are many businesses engaging in e-commerce?
to use internetics of economies of scale and offer lower prices.
What is the purpose of the marginal analysis?
A technique by which small changes in specific variables are studied that effects related variables and the whole system.
How is profit-maximizing quantity of output reached?
What is surplus?
something that remains above what is used or needed.
What is shortage?
an acute insufficiency.
What is an economic model?
a set of variables and a set of logical and/or quantitative relationships between them.
What is a market equilibrium?
the point at which total supply and demand within a market are equal.
What is the federal minimum wage?
What is the purpose of deficiency payments?
a payment made to cover a deficit.
What are the characteristics of perfect competition?
a large number of small firms, & identical products sold by all firms etc
What was the purpose of the Sherman Anitrust Act?
authorized the federal government to institute proceedings against trusts in order to dissolve them.
ECONOMICS UNIT 2