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Flashcards in ECON- Section 1 Deck (10)
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1

6 Factors that influence quantity demanded

price
income of consumers
price or related goods
consumer preferences
expected price in future
number of consumers in market

2

Market Equilibrium

price is at a level which quantity demanded equals quantity supplied

3

Opportunity Cost

what a firm's owners give up to use resources to produce goods or services

4

Explicit Costs

monetary opportunity costs of using market-supplied resouces

5

Implicit Costs

non monetary opportunity costs of using owner-supplied resources

6

Economic Profit

the difference between total revenue and total economic cost

7

Accounting Profit

difference between total revenue and explicit costs

8

Principal-Agent Problem

the conflict that arises when the goals of management (agent) don't match the goals of the owner (principal)

9

Market Structure

market characteristics that determine the economic environment in which a firm operates

10

Economic characteristics needed to describe a market

- number and size of the firms operating in the market
- the degree of product differentiation among competing producers
- likelihood of new firms entering a market when incumbent firms are earning economic profits