Econ 102 Midterm 1
surplus
quantity supplied exceeds the quantity demanded market price is above equilibrium firms have unsold goods piling up
net worth
subtracting the value of a firm's liabilities from the value of its assets equals...
disadvantage for corporations
costly to organize
has a lower opportunity cost in the production of that good
if a country has a comparative advantage in the production of a good, then that country...
an inferior good
if an increase in income leads to a decrease in the demand for salami, then salami is...
perfectly competitive market
many buyers and sellers, all firms selling identical product, and no barriers for new firms entering the market
quantity demanded equals quantity supplied
at market equilibrium...
consumption, investment, government purchases, and net exports
four major categories of expenditure
advantage for corporations
greater ability to raise funds
entrepreneur
operate businesses that produce goods and services and bring together factors of production
disposable personal income
personal income minus personal tax payments
gross domestic product (GDP)
the market value of all final goods and services produced in a country during a period of time
corporations
there is a legal distinction b/w personal assets of the owners of the firm and the assets of the firm
law of supply
there is a positive relationship between price and quantity supplied and as the price of a product increase, firms will supply more of it to the market
normative economic statement
tobacco products should be banned in all public places
firms and households
two main categories of participants in markets
shows how households and firms are linked through product and factor markets
what is the circular flow diagram?
productive efficiency
when goods and services are at the lowest possible cost
purchases by federal, state, and local government
which levels of government spending are included in government spending?
households
which participants are of greatest importance in determining what goods and services are produced?
a discovery of a more efficient production process
would shift a nations production possibilities frontier outward