18. Microeconomics and its main key words

Microeconomics is a branch of economics that studies the behavior of individual households and firms in making decisions on the allocation of limited resources. Typically, it applies to markets where goods or services are bought and sold. Microeconomics examines how these decisions and behaviors affect the supply and demand for goods and services, which determines prices, and how prices, in turn, determine the quantity supplied and quantity demanded of goods and services. Key word: A consumer is a person or group of people that are the final users of products and or services generated within a social system. A consumer may be a person or group, such as a household. Supply is the amount of a product which is available to customers. demand is an economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service.

19. Money appearance, functions

- money paid by a promoter of an event to a particular celebrity in order to ensure that the celebrity takes part in the event

The main functions of money

Money manifest itself through its functions. Usually distinguished features such as money:

Measure of value. Heterogeneous products are equated with each other and exchange on the basis of price (exchange ratio, the value of those goods, expressed in the amount of money).

Medium of exchange. Money is used as an intermediary to handle the goods. This function is essential ease and speed with which money can be exchanged for any other item (liquidity ratio). When using a money commodity producer is able, for example, to sell their wares today, and only buy raw materials in a day, week, month, etc. However, he is able to sell their goods in one place, and the right to buy it at all in another.

Means of payment. Money is used for registration and payment of debts. This function takes an independent meaning for situations of unstable commodity prices. For example, was bought on credit products. The amount of debt in terms of money, but not the amount of goods purchased. Subsequent changes in the price of goods has no effect on the amount of debt that must be paid in cash.

A store. The money collected, but not used, allow transferring purchasing power from the present into the future. Perform the function of a means of accumulating money, temporarily involved in the cycle.

World money. Foreign trade relations, international loans, the provision of services outside partner led to the appearance of world money.

20. monopoly. A monopoly (from Greek monos μόνος (alone or single) + polein πωλεῖν (to sell)) exists when a specific person or enterprise is the only supplier of a particular commodity (this contrasts with a monopsony which relates to a single entity's control of a market to purchase a good or service, and with oligopoly which consists of a few entities dominating an industry).Monopolies are thus characterized by a lack of economic competition to produce the good or service and a lack of viable substitute goods.The verb "monopolize" refers to the process by which a company gains the ability to raise prices or exclude competitors. In economics, a monopoly is a single seller. In law, a monopoly is a business entity that has significant market power, that is, the power, to charge high prices.Although monopolies may be big businesses, size is not a characteristic of a monopoly. A small business may still have the power to raise prices in a small industry (or market). Monopolies can be established by a government, form naturally, or form by mergers. A monopoly is said to be coercive when the monopoly actively prohibits competitors by using practices (such as underselling) that derive from its market or political influence. There is often debate of whether market restrictions are in the best long-term interest of present and future consumers

21. Organization-juridical forms of entrepreneurship Commercial organizations can be created in various legal forms, such as: business partnerships, business companies, production cooperatives, state and municipal unitary enterprises.

Non-profit organizations can be created in the form of consumer cooperatives, social or religious organizations (associations), charitable and other funds, as well as in other forms prescribed by law.

Nonprofit organizations may engage in business activities only insofar as it serves the purpose for which they are created and supports those goals.For individuals involved in entrepreneurial activities without forming a legal entity are - individual entrepreneurs and peasant (farmer's) economy.

Proprietorship

The proprietorship is the simplest LFO—one that has no separate legal existence from its owner. A proprietorship is simply a person operating a business under her own name or a trade name (“doing business as”).

Partnership

In order to deal with many of the limitations imposed by the proprietorship LFO, the partnership was established as a legal business entity whereby a group of two or more persons enter into a legal contract in which the partners agree to operate a business and share the profits from that business.

Corporation

A corporation is the most complex LFO. A corporation is a separate legal entity from its owner and, as such, is recognized as a “legal person” that can enter into contracts and enjoys all the legal rights of a “natural person.” There are two primary types of corporations in the U.S.—the C-corporation and the S-corporation.

C-corporations are subject to corporate income tax at both federal and state levels. Any earnings distributed to shareholders as dividends are subject to a second level of taxation at personal income tax rates. An S-corporation is a firm that elects special tax status as defined by Subchapter S of the Internal Revenue Code.

Limited-Liability Company

The limited-liability company (“LLC”) is a relatively new business structure allowed under most state laws, but not recognized as an LFO by the IRS, that is, in essence, a hybrid between the partnership and the S-corporation. Owners of an LLC enjoy limited liability, ease of transfer of ownership shares, pass-through of income to the owners, and less administrative burden than faced by owners of a corporation.

22. perfectly competitive markets. A firm’s decision about how much to produce or what price to charge depends on how competitive the market structure is. If the Cincinnati Bengals raise their ticket prices by 5%, there will be a small reduction in the quantity of tickets demanded. If the corner gas station raises its gasoline prices by 5%, there will be a huge reduction in the gas demanded. In a very competitive market like the local gasoline market, a single station has very little choice in what price to charge. If the station is busy there is no reason to lower the price, but if it raises its price by 10 cents a gallon, it will have almost no customers. We will study the extreme case of perfect competition, where firms are “price takers.” In a perfectly competitive market, there are many buyers and sellers, so each buyer or seller is a price taker, all sellers supply the same, identical product. This is the model of supply and demand. If a seller could influence the price, it would not be acting according to a supply curve. In the long run, we also require that firms can freely enter or exit the market.

23. price and its calculation In ordinary usage, price is the quantity of payment or compensation given by one party to another in return for goods or services.

In modern economies, prices are generally expressed in units of some form of currency. (For commodities, they are expressed as currency per unit weight of the commodity, e.g. euros per kilogram.) Price sometimes refers to the quantity of payment requested by a seller of goods or services, rather than the eventual payment amount. This requested amount is often called the asking price or selling price, while the actual payment may be called the transaction price or traded price. Likewise, the bid price or buying price is the quantity of payment offered by a buyer of goods or services, although this meaning is more common in asset or financial markets than in consumer markets.

CALCULATION Prices

1) the process of pricing, which takes into account production and other costs;

2) document, which made calculation of prices.

24. Factors of production An economic term to describe the inputs that are used in the production of goods or services in the attempt to make an economic profit. The factors of production include land, labor, capital and entrepreneurship.

Land (natural resource) - natural resources used in the creation of products, paid in economic rent, because they are simply irreproduceable.

Labor - human efforts provided in the creation of products, paid in wage.

Capital goods - human-made goods or means of production (including machinery, building and so forth) used in the production of other goods, paid in interest.

Income from exploiting the 3 production factors comprises the national income.

Capital and labor are active factors while land is passive. One can only shift capital and labor rather than land which is given limited, to get a production-factor combination, which is further reflected in the technology a firm employs to produce products and services.

Labor operates capital to produce. The ratio of labor over capital is a major decision almost all firms must make. In the decision process, decision makers must understand that neither too much labor per unit of capital nor too much capital per unit of labor is acceptable since either way efficiency is not achieved. The 2 factors must come around someplace that both of them contribute equally to the final economic value realized.

25. Production forces and production relations. The productive forces.The productive forces (it. Produktivkräfte) is a means of production, and people with specific experience and skills to work and produce the means of production. Thus, people is the main element of the productive forces of society. Productive forces are leading the public production. The level of development of the productive forces is characterized by a degree of social division of labour and the development of the means of labor, particularly technology, as well as the degree of development of the productive skills and scientific knowledge.

Productive forces exist only as social productive forces: by active interaction with nature, people simultaneously enter into social relations among themselves. The productive forces in conjunction with the industrial relations are a way of production.

Production relations (industrial-economic relations) — the relationship between humans, the process of social production and social product, from production to consumption.

The term "industrial relations" was formulated by Karl Marx ("the Communist Manifesto (1848).

Industrial relations differ from industrial relations so that they express the relationship of people through their relationship to the means of production, i.e. the relations property.

Industrial relations are the basis for politics, ideology, religion, morality.

Relations of production are the social form of productive forces. Together, they are two sides of each mode of production and associated with each other under the law that relations of production and the level of development of the productive forces: the relations of production are added depending on the nature and the level of development of the productive forces as the form of their functioning and development, as well as the forms of ownership. In turn, industrial relations influence the development of the productive forces, accelerating or braking. Industrial relations determine the distribution of the means of production and distribution in the structure of social production

26. property and its form Property is any physical or intangible entity that is owned by a person or jointly by a group of people or a legal entity like a corporation. Depending on the nature of the property, an owner of property has the right to consume, sell, rent, mortgage, transfer, exchange or destroy it, or to exclude others from doing these things.

Important widely recognized types of property include real property (the combination of land and any improvements to or on the land), personal property (physical possessions belonging to a person), private property (property owned by legal persons or business entities), public property (state owned or publicly owned and available possessions) and intellectual property (exclusive rights over artistic creations, inventions, etc.), although the latter is not always as widely recognized or enforced.A title, or a right of ownership, establishes the relation between the property and other persons, assuring the owner the right to dispose of the property as the owner sees fit.

The main forms of property are: private, collective (group) and the public.

Private property is the place where the means and results of production belong to individuals. It gives rise to a material interest of such persons in the management of real factors of production in order to achieve maximum economic benefit.

Collective (group) characterizes the identity of the property and results of production specific group of persons. Each member of the group is co-owner of production factors and products. By group of property include community, family, co-operative, the property of the staff and others

Public ownership is a joint asset, ie, the identity of certain objects to society. This form of ownership is functioning as a state property.

Based on the basic forms of ownership (private, collective and public) having its derivative forms - joint stock companies, co-operative, the property of the labor collective, joint, etc.

27. subject of economic theory With the development of economics as a science is changing the treatment of its subject. Economists interested in a wide range of problems, and at different stages of economic development at the forefront of the provision of some of them. Some economists believed that the object of the study of economic discipline are issues of material well-being of society, while others - social problems and, above all, diverse tasks of organizing the exchange and consumption, and others - the problem of creation and distribution of wealth, and the fourth - the problems of everyday business people. Gradually crystallized the subject of economic analysis. Its modern definition comes from the fact that any society faces a major economic problem: society's resources are limited or scarce, and his material needs are endless. In the end, all economic problems are reduced to one: how to achieve the greatest benefits at the lowest cost. The subject of economic theory are the relations that arise between people in the process of production, distribution, exchange and consumption of goods and services in a world of limited resources. The purpose of discipline is to achieve efficient use of scarce economic resources in order to satisfy the material needs of people.

Consequently, subject of economic theory - is a study of the economic laws and economic relations, acting in a process of public production and motivation of the choice managing subjects the ways of the optimum limited resources usage for the reason of satisfactions increasing individual’ and society’s needs.

28. supply and supply law A fundamental economic concept that describes the total amount of a specific good or service that is available to consumers. Supply can relate to the amount available at a specific price or the amount available across a range of prices if displayed on a graph. This relates closely to the demand for a good or service at a specific price; all else being equal, the supply provided by producers will rise if the price rises because all firms look to maximize profits.

Supply and demand trends form the basis of the modern economy. Each specific good or service will have its own supply and demand patterns based on price, utility and personal preference. If people demand a good and are willing to pay more for it, producers will add to the supply. As the supply increases, the price will fall given the same level of demand. Ideally, markets will reach a point of equilibrium where the supply equals the demand (no excess supply and no shortages) for a given price point; at this point ,consumer utility and producer profits are maximized.

The "law of supply" is a fundamental principal of economic theory which is that quantities respond in the same direction as price changes. In nondifferentiable terms, the law of supply can be expressed as:

(p - p')(y-y') ≥ 0 [2] for all p, p', y that are an element of y(p) and y' that are an element of y'(p).

In other words, the law of supply states that (all other things unchanged) an increase in price results in an increase in quantity supplied. This means that producers are willing to offer more products for sale on the market at higher prices by increasing production as a way of increasing profits.

29. The invisible hand. Term used by Adam Smith to describe the natural force that guides free market capitalism through competition for scarce resources. According to Adam Smith, in a free market each participant will try to maximize self-interest, and the interaction of market participants, leading to exchange of goods and services, enables each participant to be better of than when simply producing for himself/herself. He further said that in a free market, no regulation of any type would be needed to ensure that the mutually beneficial exchange of goods and services took place, since this "invisible hand" would guide market participants to trade in the most mutually beneficial manner. An invisible hand process is one in which the outcome to be explained is produced in a decentralised way, with no explicit agreements between the acting agents. The second essential component is that the process is not intentional. The agents' aims are not coordinated nor identical with the actual outcome, which is a byproduct of those aims. The process should work even without the agents having any knowledge of it. This is why the process is called invisible. The system in which the invisible hand is most often assumed to work is the free market. Adam Smith assumed that consumers choose for the lowest price, and that entrepreneurs choose for the highest rate of profit. He asserted that by thus making their excess or insufficient demand known through market prices, consumers "directed" entrepreneurs' investment money to the most profitable industry.

30.