Economics Competitive Markets Quiz

The amount of a good buyers are willing to purchase at a given price.

The relationship between price and quantity demanded: as price rises, quantity demanded falls, and vice versa.

A graph showing the relationship between price and quantity demanded. It slopes downward because of the law of demand.

A company produces a good or service more efficiently than its competitors, using the same resources.

A company should specialize in producing goods or services where their opportunity cost is lowest compared to others.

The price at which quantity supplied equals quantity demanded, resulting in a stable market.

The amount of a good bought and sold at the equilibrium price.

The additional satisfaction a consumer gets from consuming one more unit of a good. It decreases as more units are consumed.

Decisions regarding what should be, based on value judgments and opinions. It often involves ethical considerations and preferences.

Statements based on verifiable facts and observations. They can be tested and proven true or false.

The value of the best alternative forgone when a choice is made. It represents the cost of choosing one option over another.

When an individual, company, or country can produce a good or service at a lower opportunity cost than others. It means they are relatively more efficient in producing that good.

A Latin phrase meaning 'all other things being equal.' It assumes that all other factors except the one being considered remain constant.

A movement along the demand curve, representing a change in the quantity demanded due to a change in price, keeping other factors constant.

A shift of the supply curve to the left, indicating a decrease in the quantity supplied at each price level. This occurs due to factors like higher production costs, bad weather, or changes in government regulations.

A shift of the supply curve to the right, indicating an increase in the quantity supplied at each price level. This occurs due to factors like lower production costs, technological advancements, or better weather.

The responsiveness of quantity demanded to changes in price. It measures how much the quantity demanded changes for every 1% change in price.

A government-imposed maximum price that can be charged for a good or service. It aims to make goods more affordable for consumers.

A government-imposed minimum price that must be paid for a good or service. It aims to protect producers from low prices.

The responsiveness of quantity supplied to changes in price. It measures how much the quantity supplied changes for every 1% change in price.

A situation where a firm enjoys cost advantages as it increases production. This leads to a decrease in average total cost per unit.

A situation where a firm experiences higher costs as it increases production. This leads to an increase in average total cost per unit.

The cost of using a resource that the firm already owns, measured by the value of the best alternative use of that resource.

The cost of using a resource that the firm purchases from another person or firm.

The additional output produced by using one more unit of a variable input, holding all other inputs fixed.

The situation where the marginal product declines as more and more of a variable input is used with a fixed input.

The quantity of output that minimizes average total cost.

A situation where the average total cost of production remains constant as output increases.

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs.

The difference between a firm's total revenue and its explicit costs.

A situation where producers charge different prices for the same good or service based on consumer willingness to pay.

The ability of an individual or firm to influence prices in a market, even if it means losing customers.

The principle that all costs become variable in the long run, meaning all expenses can be adjusted based on production levels.

Occurs when the producer knows exactly how much each consumer is willing to pay for a product. It is the most extreme form of price discrimination and maximizes producer surplus.

A good that can only be used by one person at a time. Once consumed, it is unavailable to others.

A type of tax levied on the value of a good, where the amount of tax increases with the price of the good.

A good that can be used by multiple people without diminishing its value for others. One person's use doesn't prevent others from using it.

Occurs when a single firm is the sole producer of a good or service without close substitutes. This gives the firm significant control over pricing.

A good that can be prevented from being used by those who haven't paid for it. Access is restricted.

A form of market structure where firms can differentiate their products, giving them some power over prices.

A situation where a transaction has an impact on individuals or other transactions not directly involved in the original transaction.

A good for which it is impossible to prevent people from using it, even if they haven't paid for it.

The situation when individuals benefit from a good or service without contributing to its cost. This often occurs with non-excludable goods, leading to under-provision of the good.

Refers to how meaningful and valuable a person finds their job, impacting their motivation and satisfaction.

The overuse or depletion of a shared resource when there isn't a clear price or ownership structure. It occurs frequently with non-excludable but rival goods.

The practice of charging different buyers different prices for the same product, often based on willingness to pay or characteristics.

A scenario where one firm can produce the entire output of a market at a lower cost than multiple firms, often due to economies of scale.

The point where the marginal cost curve intersects the marginal revenue curve for a monopoly; this is where the monopoly maximizes its profits.