Basic Micro Reviewer Monopoly - a kind of market structure wherein there

is only one supplier of a product or service.

Deflation - A fall in the general level of prices.
Economics - A study of how individuals within a
Oikonomia - is a Greek word which means society generally make choices that involve the use of
‘Household’. The study of the academic discipline scarce resources from among alternative wants that
starts in managing your household such as budgeting, need to be satisfied.
paying bills, etc.
Law of Diminishing Returns - is an economic
Expansion - A speed-up in the pace of economic principle stating that as investment in a particular
activity. area increases, the rate of profit from that investment,
after a certain point, cannot continue to increase if
John Maynard Keynes - is an economist and the other variables remain at a constant. As investment
father of modern macroeconomics. He published the continues past that point, the rate of return begins to
book entitled ‘General Theory Employment, Interest, decrease.
and Money’.
Circular Flow of Economy Model - It demonstrates
Trough - The lower turning point of a business how money moves through society.
cycle, where a contraction turns into an expansion. It
also marks the end of a contraction as well as the Marginal Utility - is the added satisfaction that a
beginning of possible recovery. consumer gets from having one more unit of a good
or service.
Scarcity - an economic condition wherein there is
not enough resources to satisfy all the demands of the Households - are buyers in the market for goods and
people. services. A household is a group of people who live
together and share money.
Contraction - A slowdown in the pace of economic
activity. Utility - referring to the satisfaction received from
consuming a good or service.
Firms - are organizations that produce goods and
services. They are typically owned and operated by Possible Enumeration
individuals or groups of individuals, and are Determinants of Demand
motivated by the desire to make a profit. - Price of Good
- Taste or level of Desire for the Product by the
Gross Domestic Product (GDP) - is the standard Buyer
measure of the value added created through the - Income of the Buyer
production of goods and services in a country during - Prices of Related Products
a certain period. - Future Expectations
Supply-Shifting Factors
Ceteris Paribus - means ‘other things held constant’ - Prices of Other Goods
- Number of Sellers
Partnership - it is an agreement in which two or - Prices of Relevant Inputs
more persons combine their resources in a business - Technology
with a view to make a profit. - Expectations
Market Structure
Price - the amount of money expected, required, or - Perfect Competition
given in payment for something. - Imperfect Competition
- Monopolistic Competition
- Oligopoly
- Monopoly - Gravity Model - predicts trade based on the
Maslow’s Hierarchy of Needs distance between countries and the interaction of the
- Physiological countries’ economic sizes.
- Safety
- Love/Belonging
- Esteem
- Self Actualization
Proprietorship Advantages
- Easy to Start
- Profits Stay with Owner
- Pride of Ownership
- Complete Control
- Lower Taxes
Corporation Advantages
- Easy to Raise Funds
- Limited Liability
- Unlimited Life
- Specialized Management
- Risks are Shared
Incorporation Document
- Articles of Incorporation
- Charter
- Stock
- Public Corporation
- Private Corporation

International Trade - This refers to the exchange of

goods and services across international boundaries or
territories. In most countries, it represents a
significant share of GDP.
Globalization - this refers to the increasing
interconnectedness of people and places as result of
advances in transport, communication and
information technologies that cause political,
economic, and cultural convergence.
Free Trade – it refers to a policy whereby the
government does not intervene in trading between
nations by tariffs, quotas or other means.

International Trade Theory

- Ricardian Model focuses on comparative
advantage
- Heckscher-Ohlin Model was produced as an
alternative to the Ricardian model of basic
comparative advantage.
- Specific Factors labor mobility between industries
is possible while capital is immobile between
industries in the short run.