Econ Final

Question 1

Definition of supply

Answer 1

The quantity of a good/service that a producer is willing/able to produce at a given price at a given time

Question 2

Law of demand

Answer 2

As price falls, quantity demanded rises

Question 3

Law of supply

Answer 3

As price rises, quantity supplied increases

Question 4

Elasticity def

Answer 4

A measurement of responsiveness

Question 5

Elasticity of demand def

Answer 5

Measures how much demand for a good/service changes when there is a change in the determinant

Question 6

Price elasticity of demand def

Answer 6

Measuring how much quantity demanded of a good/service changes relative to a change in price

Question 7

Unit elastic def

Answer 7

Price change is proportionate to quantity change

Question 8

Inelastic def

Answer 8

Demand will remain regardless of price

Question 9

Elastic def

Answer 9

Demand is perfectly responsive to price change

Question 10

Cross elasticity of demand def

Answer 10

Change in quantity of one good/service is affected by change in price of another good/service

Question 11

Income elasticity of demand def

Answer 11

Measures how much demand for good/service changes relative to income

Question 12

Price elasticity of supply

Answer 12

Measuring how much quantity supplied of a good/service changes relative to change in price

Question 13

Subsidy

Answer 13

Payment per unit of output from the gov to a firm

Question 14

Minimum price control

Answer 14

Gov sets artificial minimum price above price equilibrium (artificial surplus)

Question 15

Maximum price control

Answer 15

Gov sets artificial maximum below price equilibrium (artificial shortage)

Question 16

Externality

Answer 16

When the consumption/production of a good/service negatively/positively affects a 3rd party

Question 17

(-) externality of production

Answer 17

When production of good/service negatively affects 3rd party

Question 18

(+) externality of production

Answer 18

When prod of good/service (+) affects 3rd party

Question 19

Sustainability

Answer 19

Consuming resources at a rate that preserves them for future generations

Question 20

Imperfect competition (information)

Answer 20

Consumers/producers don’t have access to market and market isn’t competitive

Question 21

Aggregate demand

Answer 21

Total demand for all goods/services at all price levels

Question 22

Fiscal policy

Answer 22

Set of gov policies that oversees taxation and gov spending

Question 23

Exchange rate

Answer 23

Value of one currency expressed in terms of another

Question 24

Monetary policy

Answer 24

Set of official policies that oversees interest rates and money supply

Question 25

Aggregate supply

Answer 25

Total supply of all goods/services at all price levels

Question 26

Unemployment

Answer 26

Those of working age who are without work but who are available for work at the current wage rates

Question 27

Recession

Answer 27

2 or more consecutive fiscal quarters of (-) GDP growth

Question 28

Depression

Answer 28

4 or more consecutive fiscal quarters of (-) GDP growth

Question 29

Inflation

Answer 29

Persistent increase in average price level

Question 30

Deflation

Answer 30

Persistent decrease in average price level

Question 31

Monetarism

Answer 31

Can control inflation/deflation based on money policy

Question 32

Consumer price index (CPI)

Answer 32

Measure market basket of goods

Question 33

Free trade

Answer 33

Gov/state doesn't affect trade policy

Question 34

Protectionism

Answer 34

Gov/state does affect trade policy

Question 35

Tariff

Answer 35

Tax on imported goods

Question 36

Quota

Answer 36

Physical limit on quantity and/or value of good/service that can be imported into a country

Question 37

Economic integration

Answer 37

Describes a process where by countries coordinate and link their economic policies

Question 38

Trading bloc

Answer 38

Group of countries that join together in order to increase trade between themselves and/or to gain economic benefits from cooperation in some level

Question 39

Definition of demand

Answer 39

Willingness and ability of consumers to purchases a good/service at a given price at a given time

Question 40

Interest rate

Answer 40

Cost of borrowing

Question 41

Scarcity

Answer 41

A situation where unlimited wants exist but the resources available to meet them are limited.

Question 42

Monopoly

Answer 42

Where there is only one dominant firm in the industry

Question 43

Oligopoly

Answer 43

Market structure dominated by a few firms or product supplied by few firms

Question 44

Frictional unemployment

Answer 44

Short-term

Question 45

Structural unemployment

Answer 45

Permanent decline in demand for specific type of labor

Question 46

Seasonal unemployment

Answer 46

Based on the seasons

Question 47

Dumping

Answer 47

When a good/service is sold in a foreign country for a price lower than in the domestic country or than its cost of production