| A | B |
|---|
| Barter | Exchange goods without involving money |
| Board of Directors | A group of people elected by the stockholders of a corporation to set the policies for the corporation |
| Businesses | Organizations that produce goods or services |
| Circular Flow | Flow of money and resources from businesses to households and from households to businesses |
| Corporation | An organization that is authorized by law to carry on an activity but treated as though it were a single person; owned by stockholder |
| Demand | Quantity of a product that consumers are willing / able to buy at a certain price |
| Elasticity | Demand is sensitive to price changes; lots of substitutes |
| Factor Market | The exchange in which businesses must make in order to produce things |
| Firms | Businesses; organizations that produce goods or services |
| Households | Consumers who purchase products from firms and use them to satisfy needs and wants. All individual households as a group |
| Inelasticity | Demand is not affected by price changes; one-of-a-kind item |
| Law of Demand | Consumers buy more of a good when its price decreases and less when its price increases |
| Law of Supply | Tendency of suppliers to offer more of a good at a higher price |
| Limited Liability | Situation where a shareholder is not responsible for a corporation's debts |
| Market | All the companies that sell one particular good or service |
| Market Clearing Price | The price at which the amount supplied is equal to the amount demanded; equilibrium |
| Market Structures | System used to classify different types of markets |
| Medium of Exchange | Money; anything accepted as a means of payment |
| Microeconomics | The branch of economics that studies the economy of consumers or households or individual firms |
| Partnership | A contract between two or more persons who agree to pool talent and money and share profits or losses |
| Patent | A document granting an inventor sole rights to an invention |
| Price Ceiling | A maximum price that can be legally charged for a good or service; causes a shortage |
| Price Floor | a legal minimum on the price at which a good can be sold; causes a surplus |
| Product Differentiation | A strategy that some firms use to distinguish their products from those of competitors |
| Product Market | Market in which consumers purchase goods and services from businesses |
| Profit | The amount of money left over after expenses are taken out |
| Shareholders | People who own stock in a corporation |
| Sole Proprietorship | Type of business that has a single owner |
| Standard of Value | Use of prices to compare the economic value of different goods and services |
| Stock | Shares of ownership in a corporation |
| Store of Value | Characteristic of money that allows us to save it and spend it later |
| Supply | Quantity of products a producer is willing to produce |
| Supply and Demand | Interacting forces that determine prices in a market economy |
| Unlimited Liability | A business owner is responsible for all the business's debts |
| Wages | Payments made to workers |
| Anti-trust Laws | Laws that prevent the formation of monopolies |
| Monopoly | complete control of a market by one person or group |
| Oligopoly | Two to five businesses dominate a market |
| Monopolistic Competition | Many producers make similar but not identical products. |
| Perfect Competition | A market that has many producers of identical products, prices are set by supply and demand. |
