Economics Microeconomic Concepts
Buyer - answers- This is the person or persons who purchase a good or service.
- Example: You, when you gave money to itunes to get the new Rihanna song.
Circular Flow Diagram - answers- This is the two sector economic model showing how
firms, or businesses, and consumers, or households, interact.
- Example: Goods, services, and money are exchanged in this model.
Competition - answers- In economics, this is a rivalry that may refer to rivalry among
firms, or individuals, or the race to control resources.
- Example: It is a major factor in capitalism.
Complementary Product - answers- This is a physical item that has an increase in
demand when the price of another item decreases in Economics.
- Example: The demand for hot dog buns increases when the price of hot dogs
decreases.
Consumer Good - answers- This the term for a finished product used by an individual
for personal use.
- Example: a toothbrush, socks, a book ; products which are not used to produce other
things
Corporation - answers- A type of business organization where the business is
recognized as a legal entity with the right to sell stock.
- Example: shareholders share in the profits of this type of business
, Demand - answers- 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.
- Example: coupled with supply, this determines the equilibrium price
Demand Curve - answersThis 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.
Demand Elasticity - answers- This is the relationship between changes in the demand
quantity of a good and the changes in its price.
- Example: A price drop results in an increase in the quantity demanded by consumers.
Elastic - answersThis is when the demand for a product is highly responsive to changes
in price.
Entrepreneur - answers- This is a person who takes the risk of a new business
enterprise.
- Example: one of the four factors of production; Bill Gates is one; Ted Turner is one
Equilibrium Price - answers- Determined by the intersection of the supply and demand
curves on a graph
- Example: this is the price that suppliers and consumers agree on; there should be no
shortage or surplus
Factor Market - answers- That part of the economy where labor and resources are sold
- Example: the part of the economy other than the product market
Goods - answers- In economic terms, this is a product that can be used to satisfy a
want or need.
- Example: Bottled water, a jacket, or a TV.
Households - answersThis is the section of the economy made up of individuals and/or
families. It is one of the main sectors.
Incentive - answers- Any factor, usually financial, to influence one choice over another
by an individual or business.
- Example: The company offered the employee a $5000 signing bonus to work for the
company.
Inelastic - answersThis is when the demand of a product is weakly responsive to price
changes.
Law of Demand - answers- This is the rule stating that more of a product will be
consumed at a lower price and less will be consumed at a higher price.
- Example: Along with the Law of Supply, one of the basic principles of economics.
Buyer - answers- This is the person or persons who purchase a good or service.
- Example: You, when you gave money to itunes to get the new Rihanna song.
Circular Flow Diagram - answers- This is the two sector economic model showing how
firms, or businesses, and consumers, or households, interact.
- Example: Goods, services, and money are exchanged in this model.
Competition - answers- In economics, this is a rivalry that may refer to rivalry among
firms, or individuals, or the race to control resources.
- Example: It is a major factor in capitalism.
Complementary Product - answers- This is a physical item that has an increase in
demand when the price of another item decreases in Economics.
- Example: The demand for hot dog buns increases when the price of hot dogs
decreases.
Consumer Good - answers- This the term for a finished product used by an individual
for personal use.
- Example: a toothbrush, socks, a book ; products which are not used to produce other
things
Corporation - answers- A type of business organization where the business is
recognized as a legal entity with the right to sell stock.
- Example: shareholders share in the profits of this type of business
, Demand - answers- 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.
- Example: coupled with supply, this determines the equilibrium price
Demand Curve - answersThis 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.
Demand Elasticity - answers- This is the relationship between changes in the demand
quantity of a good and the changes in its price.
- Example: A price drop results in an increase in the quantity demanded by consumers.
Elastic - answersThis is when the demand for a product is highly responsive to changes
in price.
Entrepreneur - answers- This is a person who takes the risk of a new business
enterprise.
- Example: one of the four factors of production; Bill Gates is one; Ted Turner is one
Equilibrium Price - answers- Determined by the intersection of the supply and demand
curves on a graph
- Example: this is the price that suppliers and consumers agree on; there should be no
shortage or surplus
Factor Market - answers- That part of the economy where labor and resources are sold
- Example: the part of the economy other than the product market
Goods - answers- In economic terms, this is a product that can be used to satisfy a
want or need.
- Example: Bottled water, a jacket, or a TV.
Households - answersThis is the section of the economy made up of individuals and/or
families. It is one of the main sectors.
Incentive - answers- Any factor, usually financial, to influence one choice over another
by an individual or business.
- Example: The company offered the employee a $5000 signing bonus to work for the
company.
Inelastic - answersThis is when the demand of a product is weakly responsive to price
changes.
Law of Demand - answers- This is the rule stating that more of a product will be
consumed at a lower price and less will be consumed at a higher price.
- Example: Along with the Law of Supply, one of the basic principles of economics.
