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Flashcards in HomeWork Three Questions Deck (16)
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1

Adam smith listed three reasons for specialization to increase productivity. What are they?

Repetition, Continuity, and Innovation

2

What is comparative Advantage?

The ability of a person or nation to produce a good at a lower opportunity cost than other person or nation.

3

In the market system the price is a signal for what?

The relative scarcity of the product

4

In the market sees a massive uptick in demand for widgets. An expected reaction of an entrepreneur would be to do what...?

Enter the widget business. Get on that widget game.

5

Adam Smith said that when people act in their own economic interests it does what..?

promotes the interest of society as a whole.

6

Is pollution an example of a market failure?

Yes it is because the pollution of big factories are not something accounted for.

7

The government uses antitrust funds to foster competition by

breaking up monopolies

8

when drawing a market demand curve everything stays constant expect two things. What are they?

Price of the product and quantity of the product

9

When drawing the supply curve everything is held constant. What changes?

Price and Quantity

10

The market demand curve is the ________ sum of the individual demand curves

Horizontal

11

is the relationship between price and quantity positive or negative?

Negative

12

A decrease in the price of a specific good does what to the quantity supplied of the specific good?

decreases

13

A change in price causes movement along the supply curve and a change in what?

quantity supplied

14

The intersection of the supply curve and demand curve is known as.

Market Equilibrium

15

How does excess demand occur?

When the price is less than the equilibrium price

16

Excess supply occurs when the price is

Greater than the equilibrium price