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Questions and Answers
What term is used to describe products or services required to support human life and activities that are purchased regardless of price variations?
What term is used to describe products or services required to support human life and activities that are purchased regardless of price variations?
In a situation where only a few individuals produce a certain product and any action of one has a significant impact on the others, it is referred to as:
In a situation where only a few individuals produce a certain product and any action of one has a significant impact on the others, it is referred to as:
When a commodity or service is supplied by numerous vendors with no barriers to entry for additional vendors, this market structure is known as:
When a commodity or service is supplied by numerous vendors with no barriers to entry for additional vendors, this market structure is known as:
Which term describes the amount that a willing buyer will pay to a willing seller when both parties have equal advantages and are not under compulsion to buy or sell?
Which term describes the amount that a willing buyer will pay to a willing seller when both parties have equal advantages and are not under compulsion to buy or sell?
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What does utility refer to in economics?
What does utility refer to in economics?
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In financial accounting, a summary of assets, liabilities, and net worth is known as:
In financial accounting, a summary of assets, liabilities, and net worth is known as:
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What do we call a formal organization of producers within an industry forming a perfect collision to increase profit and block newcomers?
What do we call a formal organization of producers within an industry forming a perfect collision to increase profit and block newcomers?
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What is the term for the act of charging two or more buyers or sellers different prices for the same product based on different elasticities of supply or demand?
What is the term for the act of charging two or more buyers or sellers different prices for the same product based on different elasticities of supply or demand?
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Which law states that an increase in variable factors beyond a certain point results in less than proportionate increase in output?
Which law states that an increase in variable factors beyond a certain point results in less than proportionate increase in output?
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What do we call the decrease in value of a physical property over time due to wear and tear?
What do we call the decrease in value of a physical property over time due to wear and tear?
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In business terms, what is the difference between the present worth and the future worth of an asset known as?
In business terms, what is the difference between the present worth and the future worth of an asset known as?
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How would we classify an interest rate that represents the actual rate of interest on the principal for one year?
How would we classify an interest rate that represents the actual rate of interest on the principal for one year?
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What is the term for a situation in which rival firms drive prices down through attempts to undercut each other’s price?
What is the term for a situation in which rival firms drive prices down through attempts to undercut each other’s price?
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Which term refers to the price at which the quantity buyers want to buy is equal to the quantity sellers want to sell?
Which term refers to the price at which the quantity buyers want to buy is equal to the quantity sellers want to sell?
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What is the term used to describe the length of time a property can perform its intended function?
What is the term used to describe the length of time a property can perform its intended function?
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In a market with only one buyer and no substitute goods, what type of market structure is present?
In a market with only one buyer and no substitute goods, what type of market structure is present?
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Which form of business ownership is a distinct legal entity separate from its owners and can engage in various business transactions?
Which form of business ownership is a distinct legal entity separate from its owners and can engage in various business transactions?
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Which term is NOT part of a balance sheet that shows the financial status of a company at any given time?
Which term is NOT part of a balance sheet that shows the financial status of a company at any given time?
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Study Notes
Market Essentials
- Essential Goods: Products or services necessary for supporting human life and activities, purchased regardless of price fluctuations.
- Oligopoly: A market structure where a few individuals produce a specific product, and decisions from one producer significantly impact others.
- Perfect Competition: Market structure characterized by numerous vendors with no barriers to entry for additional vendors.
Economic Concepts
- Equilibrium Price: The price at which the quantity demanded by buyers equals the quantity supplied by sellers, both having equal negotiating advantages.
- Utility: In economics, refers to the satisfaction or benefit derived from consuming goods or services.
Financial Accounting
- Balance Sheet: A financial document summarizing a company's assets, liabilities, and net worth at a specific point in time.
- Present Value vs. Future Value: The difference between the current worth of an asset and its future worth, often used in time value of money calculations.
Industry Dynamics
- Cartel: A formal organization of producers within an industry that collaborates to maximize profits and hinder the entry of new competitors.
- Price Discrimination: The practice of charging different prices to different buyers or sellers for the same product, based on varying elasticities of supply or demand.
- Law of Diminishing Returns: A principle stating that increasing variable factors beyond a certain limit leads to less than proportional increases in output.
Asset Management
- Depreciation: The decrease in value of a physical asset over time due to usage, wear, or aging.
- Useful Life: The anticipated duration over which an asset will remain functional and viable for its intended use.
Market Structures
- Monopsony: A market structure characterized by only one buyer and no substitute goods available.
- Corporation: A form of business ownership recognized as a distinct legal entity separate from its owners, capable of entering into contracts and other business transactions.
Miscellaneous
- Actual Interest Rate: Represents the true rate of interest accrued on the principal amount for one year.
- Price War: A competitive situation in which rival firms reduce prices to outdo each other, potentially leading to lower profit margins for all involved.
Balance Sheet Factors
- Non-Balance Sheet Item: Any term or concept that does not typically appear on a balance sheet, often referring to operational factors or cash flow statements.
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Description
Test your knowledge on pricing strategies in microeconomics with this quiz. Questions cover topics like price wars, equilibrium price, and more.
