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Eco 4

Terms in this set (22)

managed exchange rate
Floating exchange rates for the most part however centeral banks periodically intervene to stabilise the exchange rate in the short run
Marginal Benefit
The extra or additional benefit recieved from consuming one more unit of a good
Marginal Cost
The extra of additional cost of producing one more unit of output
Marginal Revenue
The additional revenue arising from the sale od an additional unit of output
Market
Any kind of arrangement where buyers and sellers of a particular good, service or resource are linked together to carry out an exchange.
Market Failure
When a market fails to produce efficient outcomes, and in particular does not achieve allocative efficiency.
Maximum Price
Highest possible price that is allowed to be charged for a product. Set by government legislation. Usually set below equilibrium.
Merger
The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.
Merit Good
A good with positive externalities that benefit other people as well as the purchasor
Minimum Price
Lowest possible price that is allowed to be charged for a product. Set by government legislation. Usually set above equilibrium.
monetary policy
The central bank policy with respect to the quantity of money in the economy, the rate of interest and exchange rate. Now broadly accepted as the main determinant/weapon to influence of AD
Monopolistic Competition
a market structure where, like perfect competition there are many firms and freedom of entry, but where each firm produces a differentiated product, and thus they have some control over the price.
Monopoly
where is there is only one dominant firm in the industry - remember they don't have to control 100%
NAFTA
North American Free Trade Agreement
Natural Monopoly
A natural monopoly is a distinct type of monopoly that may arise when there are extremely high fixed costs of distribution. In the case of natural monopolies, trying to increase competition by encouraging new entrants into the market creates a potential loss of efficiency. It may be more efficient to allow only one firm to supply to the market because allowing competition would mean a wasteful duplication of resources.
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