micro notes 1

Question 1

Supply

Answer 1

the quantity supplied at certain prices; different than the quantity

Question 2

Demand

Answer 2

the attitude of those in the market buying

Question 3

FIrm

Answer 3

business or organization (owned by an individual)

Question 4

Factor markets

Answer 4

the exchange of inputs we produce

Question 5

Product markets

Answer 5

the exchange of goods and services

Question 6

Market power

Answer 6

a condition in which an individual or firm has an unfair advantage (decreases efficiency)

Question 7

Equal access to information

Answer 7

limits market power

Question 8

Pareto Optimality

Answer 8

a situation where there is no way to make someone better off without making someone worse off (highest efficiency)

Question 9

Elasticity

Answer 9

amount that demand responds to market conditions

Question 10

Inelastic

Answer 10

insignificant change in demand regardless of market conditions

Question 11

Monopoly

Answer 11

power of being the only seller

Question 12

Risk

Answer 12

anything that affects the outcome of your choices that can associated with a probability

Question 13

Specialization

Answer 13

individuals dividing up labor within/across trades

Question 14

Division of labor

Answer 14

increases productivity as individuals are better able to become more dexterous when they focus on one task

Question 15

Assumptions

Answer 15

an abstraction that simplifies a scenario

Question 16

Consumption

Answer 16

the act of deriving utility (sometimes using things, but only with goods)

Question 17

Fiat money

Answer 17

• items not valuable as a commodity but function as money because a government states that they are usable for debts

Question 18

Unjust outcomes

Answer 18

unfair outcomes due to inequality of the implementation of rules

Question 19

Commodity money

Answer 19

items that function as money but are also valuable themselves

Question 20

Commutative justice

Answer 20

fairness of the rules by which the “market game” is played