Is The Market System Best? Flashcards
(13 cards)
A decreasing supply of tin due to wars and the breakdown of trade led to a drastic increase in the price of bronze in the Middle East and Greece (tin being necessary for its production) it is around this time that blacksmiths developed iron and steel making techniques (as substitutes for bronze) What does the increasing price of bronze signal?
It tells people that bronze is getting harder to find and it’s higher price will signal consumers to conserve it more or seek substitutes
A decreasing supply of tin due to wars and the breakdown of trade led to a drastic increase in the price of bronze in the Middle East and Greece (tin being necessary for its production) it is around this time that blacksmiths developed iron and steel making techniques (as substitutes for bronze)
How is the increasing price of bronze an incentive?
A. Consumers will save more money by conserving bronze
B. Consumers who switch to substitutes can save money
C. Entrepreneurs can profit by developing new alternatives to bronze
D. Entrepreneurs can profit by developing ways to recycle bronze
E. All of the above ✅ «
A decreasing supply of tin due to wars and the breakdown of trade led to a drastic increase in the price of bronze in the Middle East and Greece (tin being necessary for its production) it is around this time that blacksmiths developed iron and steel making techniques (as substitutes for bronze)
Why do you think iron and steel became more common around the same time as the increase in price of bronze?
An increase in the price encourages innovation to produce substitutes
A decreasing supply of tin due to wars and the breakdown of trade led to a drastic increase in the price of bronze in the Middle East and Greece (tin being necessary for its production) it is around this time that blacksmiths developed iron and steel making techniques (as substitutes for bronze)
After the development of iron, did the supply or demand for bronze shift? Which way did it shift? Why?
The demand for bronze shifted to the left (down) because there was now a good substitute for bronze
One question that economics students often ask is “In market with a lot of buyers and sellers, who sets the price of the goods?” There are two possible correct answers to this question: “everyone” and “no one”.
What is meant by “everyone”
Nobody actually plans for a given price to be the equilibrium price
One question that economics students often ask is “In market with a lot of buyers and sellers, who sets the price of the goods?” There are two possible correct answers to this question: “everyone” and “no one”.
What is meant by “no one”
Nobody actually plans for a given price to be the equilibrium
In the face of negative publicity about the safety of a particular product, we would expect the products:
A. Demand schedule to become steeper
B. Demand schedule to become flatter
C. Demand schedule to shift to the right
D. Demand schedule to shift to the left ✅
If a tax is imposed on a particular good, the incidence of that tax falls entirely on consumers if the demand schedule for the good is
A. Horizontal ✅ «<
B. Vertical
C. Quite steep but not completely vertical
D. Quite steep but not completely horizontal
What happens to equilibrium price and equilibrium quantity in the market of widgets
The price of substitutes rises sharply
A. Price falls and quantity falls
B. Price falls and quantity rises
C. Price rises and quantity rises ✅ ««
D. Price rises and quantity falls
What happens to equilibrium price and equilibrium quantity in the market of widgets
The cost of producing widgets drops because of technology innovation
A. Price falls and quantity falls
B. Price falls and quantity rises ✅«
C. Not sure about price but quantity rises
D. Price rises and quantity falls
What happens to equilibrium price and equilibrium quantity in the market of widgets
Suppose consumers taste change in favor of widgets and at the same time cost of production goes down to technological innovation
A. Price falls and quantity falls
B. Price falls and quantity rises
C. Not sure about price but quantity rises ✅ >«<
D. Price rises and quantity falls
What region is A
See picture in notebook
B. Consumer surplus
In the picture in notebook what are the total gains from trade?
A + B
