PEQs Flashcards
Which will cause a movement along the demand curve for good X?
A change in the price of good X
Consider the market for chicken. An increase of the price of beef will…
Increase the demand of chicken
- Higher price of chicken
- Higher chicken purchases
On a production possibilities curve, a change from economic inefficiency to economic efficiency is obtained by…
Movement from one point inside the curve to a point on the curve
A public good may be defined as any good or service that…
Must be distributed to all citizens in equal shares
If an increase in bus fares in London reduces the total revenue of the public transit system, this is evidence that demand is…
Elastic
If a 5% reduction in the price of a good produces 3% increase in quantity demanded, the price elasticity of demand over this range of the demand curve is…
Inelastic
The income elasticity of demand for grapes is estimated to be 1.50.
We can conclude that grapes are…
A normal good
The change in quantity demanded resulting from a change in purchasing power is known as the…
Income effect
- Suppose a milking parlour has 2 milking stalls and 2 workers.
- It is able to milk 100 cows each day.
- When it adds a third stall with no extra workers, it is able to milk 150 cows per day.
- The marginal product of the third milking stall is…
50 cows per day
If both the marginal cost and average variable cost curves are U-shaped, at the point of minimum average variable cost, the marginal cost must be…
Equal to the average variable cost
Implicit costs are the opportunity costs of using the resources of…
Owners
Explicit costs are payments to…
Non-owners of a firm
Which statement is true for global milk consumption in the last 5 years?
Slightly increasing
Which asset has the highest average value on a dairy farm?
Livestock
Which asset has the lowest average value in a dairy farm?
Fodder reserve
Which of the large beef producer regions is not free of FMD?
- EU
- South-America
- Asia
Which country is the top beef producer in the EU?
France
Which cost has the largest share in the total cost for broilers?
Feed
When does scarcity exist?
When people consume beyond their needs
Economics is the study of…
People making choices
Ceteris paribus means…
Other relevant factors like consumer incomes must be held constant
Give an example of a pair of factors exhibiting a direct relationship
- The price of gasoline
- Amount of gasoline purchased
Opportunity cost is the cost…
Best option given as a result of choosing an alternative
Milk equivilant
The amount of milk used for producing a specific dairy product
Elements of EU market regulations
- Internal market regulation
- Direct producer subsides
- Foreign trade regulations
Hungarian export of liquid milk to…
- Italy
- Romania
- Slovenia
Hungarian import of milk products from…
- Germany
- Poland
- Slovakia
- Czech republic
Largest hen egg producer
China
Which EU country has the highest fishery & aquaculture product per capita consumption?
Spain
How many EU member states are there?
28
What is a business cycle?
Alternating periods of economic growth and contraction
Can be measured by changes in GDP
What are the 4 phases of a business cycle?
- Peak
- Recession
- Trough
- Recovery
Causes of the business cycle
Changes in the forces of supply + demand
What is a peak?
Phase of the business cycle during which real GDP reaches its maximum after rising during a recovery
Recession
- The downturn in the business cycle
- GDP declines
- Contraction
- Defined as at least 2 quarters of GDP decline
What is a trough?
- Business cycle phase where GDP reaches the minimum
- After a recession
- Turning point between recession and recovery
What is recovery?
- Upturn in the business cycle during which GDP rises
- Expansion
When is downturn considered a depression?
Depression - Historical reference to extreme deep and long recession
Economic growth
Expansion in national output measured by the annual percentage increase in a nations GDP
Why is economic growth an economic goal of a country?
- Increases standard of living
- Creates a bigger ‘economic pie’
Three types of economic indicators
- Leading
- Coincident
- Lagging
What are the leading indicators?
Variables that change before real GDP changes
Coincident indicator
Variable changing at the same time as GDP
Lagging indicator
Variable changing after GDP changes
Cause of unemployment
- Total spending falls
- Business finds it profitable to produce a lower volume of goods and avoid unsold inventory
Unemployment rate
% of people who are seeking jobs
Civilian labour force
- People 18+ who are employed/unemployed
- Not including armed forces, home makers
Discouraged worker
Someone who wants to work but has stopped searching
They think there will be no job offers
Underemployment
People working at jobs below their level of skills
Criticisms of the unemployment rate
- Does not include discouraged workers
- Does not measure underemployment
- Includes part-time workers