economics 151-225 Flashcards Preview

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Flashcards in economics 151-225 Deck (75):
1

what happens to the equilibrium price of a good if there is an increase in demand ceteris paribus

the price increases

2

what is the market supply of a good

the sum of individual supply for each supplier in a market

3

what happens to the exchange quantity of a good if there is an increase in supply ceteris paribus

the exchange quantity increases

4

what is the market clearing price of a good

the equilibrium price

5

the upward slope of the supply curve is explained by the law of increasing marginal...

cost

6

you can sell 10 hockey pucks at $5 each or 9 hockey pucks at $6 each. Calculate the PED

10% change in quantity demanded/20% change in price PED=1/2=.5

7

income elasticity of demand measures...

responsiveness of demand to consumer income

8

cross elasticity of demand measures

responsiveness of demand for a good to the price of complimentary and substitute goods

9

if price elasticity of demand is equal to one, the demand is...

unit elastic

10

if price elasticity of demand is equal to zero, then demand is...

this

11

what is the most important resource market in the us

the labor market

12

how do most economists feels about free trade

most economists support free trade

13

what happens to the total consumption possibilities for two nations that specialize according to their comparative advantages and then trade

total possible consumption increases

14

what is barter

the exchange of resources goods or services without using money

15

how did japan achieve rapid economic growth in the 1970s and 1980s

by training its workforce well and by applying technology

16

what do we use to avoid the inefficiency of a barter system

money or any other medium of exchange

17

what is a market

a mechanism that brings buyers and seller together for the purpose of making an exchange

18

what is division of labor

the act of dividing the production of a good into simple separate tasks

19

what is fiat money

a form of money that is only valuable as a medium of exchange not as a commodity and only because people believe the issuing government can back its value

20

what kind of money s paper currency

fiat money

21

what happens to the quantity demanded of a good as the price increases

quantity demanded decreases

22

what happens to the equilibrium price of a good if there is an increase in supply, ceteris paribus

the price decreases

23

what is demand

the relationship between the price of a good and the quantity of it that consumers are willing and able to buy

24

how is quantity supplied related to supply

supply is the quantity supplied at each possible price within a range of prices

25

what happens to exchange quantity if there is a simultaneous increase in demand and decrease in supply

we cannot tell exactly

26

what happens to the quantity demanded of a good as the price decreases

quantity demanded increases

27

why is the equilibrium price of a good sometimes called the market clearing price

because when there is an equal number of buyers and sellers, the market is said to clear

28

what happens to the equilibrium price of a good if there is a decrease in demand, ceteris paribus

the price decreases

29

what is quantity demanded

the quantity of a good that consumers are willing and able to buy at a particular price

30

what are of economics explores the individuals preference for a particular good

microeconomics

31

what is the term for a situation in which resources, goods, or services are exchanged

market

32

how are two boys trading baseball cards an example of a market

they are exchanging goods

33

what happens to equilibrium price when there is a simultaneous decrease in demand and increase in supply

equilibrium price decreases

34

what happens to equilibrium price if there is a simultaneous increase in both supply and demand

we cannot tell oops

35

what is the equilibrium quantity of a good or service

the quantity at which sellers ask the price that buyers are willing to spend

36

what happens to equilibrium price if there is a simultaneous increase in demand and decrease in supply

equilibrium price increases

37

what area of economics explores the behavior of individual producers and consumers

microeconomics

38

what happens to exchange quantity if there is a decrease in supply

exchange quantity decreases

39

what area of economics explores the components and behaviors of individual markets

microeconomics

40

how does a market system eliminate the need for buyers and sellers to negotiate over every individual change

with a price system

41

what is individual supply of a good

the supply of an individual producer

42

what is individual demand

the demand of one consumer for a good

43

quantity supplied increases as price increases because higher prices provide a (positive/ negative) incentive for producers

positive

44

if five dollars are worth two franc, then the ____ rate is 2.5 to 1

exchange

45

specialization in trade result in (increased/decreased) production

increased

46

when people specialize, how do they satisfy their wants and needs for goods and services they do not produce?

trade

47

specialization (increased /decreases) efficiency

increases

48

specialization (increases /decreases) dependence on the self-intrest of others.

they become interdependent

49

when individuals specialize, what must they do to satisfy their wants

trade

50

are the workers in an assembly line independent or interdependent?

interdependent

51

what term refers to any situation in which goods, services, or resources are exchanged?

a market

52

trading is simpler with money than with a better system because bartering requires a "double _____ of wants"

coincidence

53

what is the economic term for goods that are produced in a foreign country and purchased by domestic consumers?

imports

54

people tend to specialize in goods in which they have (an absolute advantage/a comparative advantage)

a comparative advantage

55

tim can write more flashcards per hour than sam can. Does tim have an absolute or a comparative advantage in flashcards?

Absolute (he many have a comparative advantage as well, but there is not enough information in the question to determine this)

56

Specialization and trade result in (increased/decreased) consumption

increased

57

specialization leads to (interdependence/independence)

interdependence

58

what is required for specialization to occur?

voluntary exchange

59

who experiences a greater level of interdependence: "jack-of-all-trades" or a specialist?

specialist

60

which is likely to require the most education and skill: division of labor or specialization?

specialization

61

what component of a market economy allows producers to specialize?

voluntary exchange

62

producers tend to specialize in the good or service that they can produce at the lowest _____ cost

opportunity

63

what is the economic term for good that are produced domestically and sold to consumers in another country

exports

64

t/f: barter requires fewer transactions than trade with the use of money?

TRUE

65

What is the term for the unique type of specialization that occurs in an assembly line?

division of labor

66

international trade occurs when one country produces a product and (imports/exports) it to another country

exports

67

What is required for voluntary exchange to occur?

al participating parties must expect to benefit from the exchange

68

t/f: people desire money for its intrinsic value.

FALSE

69

tariffs and quotas are examples of barriers to _____.

trade

70

what term refers to the trade of one good directly for another, without the use of money?

barter

71

A negative cross elasticity of demand tells us that two goods are (complements/substitutes).

complements

72

A positive cross elasticity of demand tells us that two goods are (complements/substitutes).

substitutes

73

Ticket prices go up at Clippers games, and overall ticket revenue increases at the Staples Center. This means that demand in this price range is _____.

inelastic

74

Prices increase on Daewoo automobiles, and quantity demanded plunges to zero. Demand in this price range is _____.

perfectly elastic

75

"% change in quantity divided by % change in price" is the generic formula for ________.

price elasticity of demand