HomeWork Three Questions Flashcards

(16 cards)

1
Q

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

A

Repetition, Continuity, and Innovation

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2
Q

What is comparative Advantage?

A

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

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3
Q

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

A

The relative scarcity of the product

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4
Q

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

A

Enter the widget business. Get on that widget game.

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5
Q

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

A

promotes the interest of society as a whole.

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6
Q

Is pollution an example of a market failure?

A

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

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7
Q

The government uses antitrust funds to foster competition by

A

breaking up monopolies

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8
Q

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

A

Price of the product and quantity of the product

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9
Q

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

A

Price and Quantity

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10
Q

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

A

Horizontal

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11
Q

is the relationship between price and quantity positive or negative?

A

Negative

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12
Q

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

A

decreases

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13
Q

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

A

quantity supplied

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14
Q

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

A

Market Equilibrium

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15
Q

How does excess demand occur?

A

When the price is less than the equilibrium price

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16
Q

Excess supply occurs when the price is

A

Greater than the equilibrium price