| Term | Definition |
|---|
| monopoly | single seller |
| oligopoly | few sellers |
| monopolistic competition | many sellers |
| perfect competition | very many sellers |
| price control | the least competitive something is, the more ___ they have |
| large market with numerous sellers/buyers, similar products at similar rates, easy entry/leave, obtainable info for buyers and sellers, and no price control | what are the five characteristics of a perfect competition? |
| each firm produces a small part of that total suppluy | why can't any one firm control the price in a perfect competition |
| barriers to entry | factors that make it difficult for new firms to enter a market |
| start up costs and technology | what are common barriers to entry? |
| start up costs | expenses an owner has to pay before opening a new business |
| efficient yet inelastic | perfectly competitive markets are ___ yet ____ |
| low prices and production costs | what are two benefits to a perfect competition? |
| product differentiation and advertising | what two things do firms in oligopolies do? |
| price war | a series of competitive price cuts that lowers the market price below the cost of production |
| it takes a lot of capital to enter into the market | why were there few producers in a n oligopoly? |
| there has to be caution so firms would not get into price wars with other competitors | why does an oligopoly have stable prices? |
| airplane industry, car industry, | what are examples of oligopoly? |
| deregulation | relaxation of government regulation on industry; brought people to fear higher wages and that big groups would take over |
| barriers to entry | what makes monopolies possible to be a one seller market? |
| because monopolies take advantage of their power and charge high prices | why did the US outlaw monopolistic practices in most industries? |
| natural monopoly | market that runs most efficiently when one large firm provides all the output |
| the large telephone industry | what is an example of a natural monopoly? |
| the gov controls its prices | what is the compromise for natural monopolies to exist in gov? |
| patent | gives a company exclusive rights to sell a new good or service for a specific time period |
| license | governmental issued right to operate a business |
| control over prices | what differentiates a monopoly over other competitive markets? |
| sets a price that maximizes its profit; fewer goods at higher price | how does the law of demand relate to the monopolistic prices? |
| monopolitic competition and oligopoly | what do most market structures fall into? |
| monopolistic competition | market in which many companies sell products that are similar but not identical |
| jeans, ice cream, books | what are some examples of a monopolistic competition? |
| each firm has a kind of monopoly over tis own particular product | why are markets called monopolistic competition? |
| low | what kind of barriers to entry are there in a monopolistic competition? |
| they offer produicts that are slightly different frmo any other company's | what are firms that are monopolistically competitive have slight control over their prices? |
| nonprice competition | what is the term called when monopolistic competition uses competitio thrugh ways other than lower prices to compete. Ex] colors, textures, tastes, location |
| oligopoly | market dominated by a few large firms |
| when significant barriers to entry exist | how can an oligopoly form? |
| air travel, cola, cereals, appliances, cars, movie studios, airplanes | what are examples of oligopoly firms |
| set prices or to reduce competition | what do oligopolistic firms do illegally |
| price fixing | agreement among firms to sell at the same or very similar prices, used mainly by oligopolies |
| many | does perfect competition have many or few number of firms? |
| no | is there a variety of goods in a perfect competition? |
| no | are there control over prices in a eprfect competition? |
| no | are tehre barriers to entry in a perfect competition? |
| farmer production and shares of stock | what are examples of perfect competition? |
| many | are there many or few number of firms in a monopolistic competition? |
| few | is there a variety of goods in a monopolistic competition? |
| little | is ther many or little control over prices in a monopolistic competition? |
| few | are there barriers to entry in a monopolistic competition |
| some | are there some or many variety of goods in an oligopoly? |
| some | is ther omse or many control over prices in an oligopoly? |
| high | barriers to entry in an oligopoly? |
| no | is there a variety of goods in a monopoly? |
| completely | control over prices in a monopoly? |
| public water | examples of a monopoly? |
| economies of scale | A situation in which goods can be produced more efficiently and cheaply by larger companies in monopoly; shows price going down beause fewer producers can manufacture goods. |
| image | instead of competing on price rather, how do monopolistic competitions basically compete |
| horizontal and vertical | what are the two types of integration? |
| horizontal | what is it called when companies merge with other companies that are doing the exact same type of production. they are buying out competition so when ppl want something, they have to biuy it from that company. one big step |
| vertical | many steps in production. by acquiring those diff steps, the company's money increases and production is cheaper. since they own the steps, they dont have to pay as muhch. |
| predatory pricing | a firm with monopoly power can use this; this is practice of setting market price below cost to drive competitors out of business |
| buying out their competitors | what is a way, other than predatory pricing, to reduce competition? |
| antitrust laws | prevent companies from reducing competition |
| reduce competition and higher prices | what might a merger lead to? |
| merger | when two or more companies join to form a single firm |
| deregulation | lifting or reducing of government controls over a market |
| airline, electricity, banking, railroad, gas, tv broadcasting | what are some examples of markets experiencing deregulation |
| increase competition and lower prices for consumers | what is deregulation supposed to do:? |
| patent | government protection of your product you develop |
| franchise | contract to provide services |
| license | government permit |
| FCC | who allows things to air on tv and radio? |
| unlimited liability | complete responsibility for all debts and damages |
| limited life | sole propertiership, business lasts as long as the owners keeps it that way |
| business organization | establishment formed to carry on commercial enterprise |
| sole proprietorship | what is the most common form of business organization? |
| sole proprietorship | business owned and urn by one person |
| 75 | what percent of all businesses in US are sole proprietorships? |
| owner gets to keep profits | what is the biggest advantage of the sole proprietorships? |
| yes | are sole proprietrships easy to start? |
| hard to find capital to expand business | what is a disadvantage of sole prop. |
| fringe benefits | why cant small businesses like sole prop. find good employies |
| fringe benefits | what are payments to employees other than wages, such as paid vacation, retirement pay, and health insureance? |
| partnership | business orgnization owned by two or more people |
| general partnership | what is the most common type of partnership |
| general parternship | partenrs in this share equally in both responsibility and liability ex] doctors, lawyers, accountants, etc |
| limited partnership | only one partner is required to be a general partner |
| limited liability partnership | this is where partners are limitd partners and are shielded from personal liability in certain situations |
| responsibility of business is shaed | what is an advantage of partnership |
| assets | money and other valuables |
| yes | are partnerships easy to start? |
| each partern, except in LLP, are responsible for acts of other partners | disadvantage of partnership |
| true | t/f, most large businesses in US are corporations |
| corporation | legal entity, or being, owned by individual stockholders |
| true | each stock holder has limited liability fo rfirms debts and can lose only as much as they have invested |
| stocks | stockholders own this, represent their share of ownership in corporation, part of the business |
| board of directors | stockholders elect these who make the imporatnt decisions for the corporations. appoints corporate officer who run the corporation |
| limiting liability | advantage of corporate structure, stockholders only lose amount of money they invested |
| bonds | corporations can borrow money by selling these, certificates promising to repay the money they borrow with interest |
| horizontal mergers | joint two or more firms in the same market |
| true | as corporation grows, may decide to merge with another company |
| vertical mergers | join two or more firms involved in diff stages of making the same good or service |
| conglomerates | combine companies which produce completely unrelated goods or services |
| multinational corporations (MNC's) | corporations that operate in more than one country at a time |
| unlimited life | whats the term that means corporations can continue indefinitely under certain conditions |
| unskilled labor | work primarily with hands because lack training, skills for other tasks. lowest wages |
| semi-skilled labor | workrs with enough mechanical abilities and skills to operate machines that require a minimum amount of training |
| skilled labor | operate complex equipment and can prform etheir tasks with little supervision. higehr investment in human capital, especially in areas of experience and training |
| professional labor | highest level of knowledge-based education and management skills. often earn highest incomes |
| unskilled | digging ditches, picking fruit |
| semi skilled | dishwashers, lawn servicers, mickey d's |
| skilled | carpenters, typists, tool makers, comp. technitions, comp, programmers |
| professional | doctors, scientists, lawyers |
| civilian labor force | total number of ppl 16 + who are either employed or actively seeking work |
| cant do work, armed forces, not looking for work, maternity leave, students, homemakers, etc | what are excluded from the civilian labor force |
| blue collar | what collar includes craft worelres, manufactors, non farm laborers (hands on) |
| white collar | what collar includes office workers, sales people, professins like doctors, lawyres, etc (business, higher edu) |
| pink collar | what collar includes stores, hotels, resteraunts, any services or sales? |
| unemployment rate | ppl without jobs, but actively looking for employment; [ercemtag epf matopm |
| Articles of Partnership | what is a legal doc that sets up partnerships |
| dividends | stockholder's share of corporation's profit; u get this based on number of shares of stocks you own |
| keep economy at full employment rate | what is our goal |
| 6.5% | what is our optimum to have unemployment rate |
| frictional, seasonal, structural, cyclical | what are the four types of unemployment |
| frictional | what type of unemployment occurs when people are between jobs or returning to the work force after a period of not working |
| seasonal | type of unemployment that occurs in industries that slow or shut down for a particular time of year, such as after harvest or busy holiday season |
| structural | unemployment that happens when workers' skills dont match jobs that are available. example, new tech many cost jobs in industries that rely on older ways of producing goods |
| cyclical | unemployment that occurs during recessions, when demand for goods and services drops |
| bond | a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest |
| loan | type of debt. |
Combine with other sets
Share on Facebook
Share on MySpace