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Microeconomics Terms

Terms in this set (29)

Microeconomics
The study of economics concerned with individual units of the economy such as households, firms and markets
Factor Market
The place where productive resources, land, labor and capital are exchanged for money (wages or salary)
Resource Market
The place where productive resources, land labor and capital are exchanged for money (wages or salary)
Quantity demanded (Qd)
The amount of a good or service people will buy at a given price in a given period of time
Law of demand
As the price of a good or service rises (or falls), The quantity of that good or service that people are willing and able to buy during a certain period of time (or rises).
Demand
The quantity of a good or service that buyers are willing and able to buy at all possible prices during a period of time.
Quantity supplied (Qs)
The amount of a good or service sellers are willing and able to offer at a given price in a given period of time.
Law of supply
As the price of a good or service that producers are willing and able to offer for sale during a certain period of time rises (or falls), the quantity of that good or service supplied rises (or falls).
Supply
The amount of a good or service that producers are willing and able to offer for sale at each possible price during a given period of time.
Market equilibrium
The price at which the quantity demanded by buyers equals the quantity supplied by sellers; also called the market-clearing price.
Surplus
The situation that results when the quantity supplied of a product exceeds the quantity demanded.
Shortage
The situation that results when the quantity demanded for a product exceeds the quantity supplied.
Nonprice competition
Competition by firms trying to attract customers by methods other than reducing prices; examples include advertising and promotional gifts.
Product differentiation
The attempt to make your good or service appear better than a substitute in a monopolistic competition.
Substitutes
Goods or services that may be used in place of another good or service.
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