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    Module 1 - Chapter 1 Q&A

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    Busn D
    This document provides an overview of microeconomics and macroeconomics concepts. It defines microeconomics as dealing with individual consumer and producer decisions, while macroeconomics analyzes issues related to the whole economy. The document also outlines the four major market structures in microeconomics - perfect competition, monopolistic competition, oligopoly, and monopoly - and defines related terms like outputs, inputs, relative prices, and barriers to entry. Finally, it introduces the GDP and the circular flow model.

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    Module 1 - Chapter 1 Q&A

    Uploaded by

    Busn D
    13 views2 pages
    This document provides an overview of microeconomics and macroeconomics concepts. It defines microeconomics as dealing with individual consumer and producer decisions, while macroeconomics analyzes issues related to the whole economy. The document also outlines the four major market structures in microeconomics - perfect competition, monopolistic competition, oligopoly, and monopoly - and defines related terms like outputs, inputs, relative prices, and barriers to entry. Finally, it introduces the GDP and the circular flow model.

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    This document provides an overview of microeconomics and macroeconomics concepts. It defines microeconomics as dealing with individual consumer and producer decisions, while macroeconomics analyzes issues related to the whole economy. The document also outlines the four major market structures in microeconomics - perfect competition, monopolistic competition, oligopoly, and monopoly - and defines related terms like outputs, inputs, relative prices, and barriers to entry. Finally, it introduces the GDP and the circular flow model.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    13 views2 pages

    Module 1 - Chapter 1 Q&A

    Uploaded by

    Busn D
    This document provides an overview of microeconomics and macroeconomics concepts. It defines microeconomics as dealing with individual consumer and producer decisions, while macroeconomics analyzes issues related to the whole economy. The document also outlines the four major market structures in microeconomics - perfect competition, monopolistic competition, oligopoly, and monopoly - and defines related terms like outputs, inputs, relative prices, and barriers to entry. Finally, it introduces the GDP and the circular flow model.

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    © All Rights Reserved
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    Module 1: Market and Market Failure Overview - Chapter 1 Notes

    1. What are the two branches of Economics?


    • microeconomics and macroeconomics.

    2. What is the difference between microeconomics and macroeconomics?


    • Microeconomics deals with individual consumer and producer behaviors and related issues.
    • Macroeconomics, on the other hand, deals with issues related to the whole economy (e.g., inflation,
    unemployment, public debt, exchange rate, etc.)

    3. How are Managerial decisions influenced?


    • Managerial decisions are microeconomic decisions, but they can be significantly influenced by overall
    macroeconomic health of local, national, and global economies.

    4. What is Microeconomics?
    The branch of economics that Analyzes the decisions that Individual consumers, firms, and Industries make
    as they produce, buy, and sell goods and services.

    5. What is Outputs?
    Outputs The final goods and services produced and sold by firms in a market economy.

    6. What is Inputs?
    The factors of production, such as land, labor, capital, raw materials, and entrepreneurship, that are used
    to produce the outputs, or final goods and services, that are bought and sold in a market economy

    7. What is Relative prices?


    The price of one good in relation to the price of another, similar good, which is the way prices are defined
    in microeconomics.

    8. What are the four major markets in Market Structure?


    There are four major types of markets in microeconomic analysis:
    1. Perfect competition - A market structure characterized by a large number of firms in an industry, an
    undifferentiated product, ease of entry into the market, and complete information
    available to participants.

    2. Monopolistic competition – A market structure characterized by a large number of small firms that have
    some market power as a result of producing differentiated products. This market power can be competed
    away over time.

    3. Oligopoly – A market structure characterized by competition among a small number of large firms that
    have market power, but that must take their rivals’ actions into account when developing their own
    competitive *strategies.

    4. Monopoly – A market structure characterized by a single firm producing a product


    with no close substitutes.

    9. What are the barriers to entry?


    Structural, legal, or regulatory characteristics of a firm and its market that keep other firms from easily
    producing the same or similar products at the same cost.

    10. What is Perfect competition?


    A market structure characterized by a large number of firms in an industry, an undifferentiated product,
    ease of entry into the market, and complete information available to participants.

    11. What is Imperfect competition?


    Market structures of monopolistic competition, oligopoly, and monopoly, in which firms have some degree
    of market power.

    12.
    13.

    GDP and the Circular Flow


    C = consumption spending
    I = investment spending
    G = government spending
    X = export spending
    M = import spending
    Y = household income
    S = household saving
    TP = personal taxes
    TB = business taxes

    14.
    15.
    16.
    17.

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