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Microeconomics > Test 1 > Flashcards

Test 1 Flashcards

1
Q

Economics

A

the study of choices we make among our many wants given our limited resources

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2
Q

scarcity

A

wants are unlimited

wants>resources

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3
Q

resources

A

inputs used to produce goods and services

ex: labor, capital, machines

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4
Q

dismal science

A

that wants are unlimited and resources are scares, so you are not satisfied

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5
Q

economic problem

A

scarcity

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6
Q

microeconomics

A

the household/individual/firm behavior. individual markets

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7
Q

macroeconomics

A

the study of the whole economy.

topics include: inflation, unemployment, economic growth

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8
Q

aggregate

A

total amount

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9
Q

ceteris paribus

A

holding all other things constant

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10
Q

when price goes UP what happens to demand

A

goes down

assuming everything else is held constant

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11
Q

correlation

A

when two events occur together

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12
Q

causation

A

when one event brings about another event

ex: when A rises, B rises

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13
Q

fallacy of composition

A

when you think that what applies to the individual also applies to the group

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14
Q

positive statements

A

‘what is’ , testible

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15
Q

normative statement

A

‘what should be’, subjective

ex: smoking cigs is morally wrong

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16
Q

Changes in the supply curve (acronym)

A

SPENT

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17
Q

S-

A

changes in sellers input prices

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18
Q

if the price of sugar increases, then the supply of ice cream will

A

decrease

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19
Q

P-

A

changes the price of related goods and services

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20
Q

substitutes in production-wheat and corn,

price of corn goes up then the SUPPLY of wheat will

A

decrease

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21
Q

law of supply

A

prices increases -quantity supply increases

sellers like higher prices

prices decrease , quantity supply decrease

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22
Q

quantity supplied

A

the amount that sellers are willing and able to sell

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23
Q

when the prices of corn increase, the supply stays constant, the quantity demanded ….

A

increases

24
Q

when price increases then quantity demand

A

decreases

25
Q

when price increase what happens to QD and D

A

QD- changes

D- doesn’t change

26
Q

normal good

A

starbucks, iphone

income increase, demand increase

27
Q

inferior goods

A

ramen noodles

income increases, demand decreases

28
Q

on a graph, it decreases to the _____, and increases to the ______

A

decrease-left

increase- right

29
Q

Shifts in the demand curve (acronym)

A

PYNTE

30
Q

P

A

changes in prices in related goods and services
ex: direct relationship , price of coke increases, demand for pepsi increases
substitute goods: ford and chevy, DD and starbucks

31
Q

Y

A

changes in income

32
Q

N

A

number of buyers, buyers increase, demand increases//// fewer buyers, demand decreases

33
Q

T

A

taste/preferences

34
Q

E

A

exchange, expectations (interns of price)
if you expect a sale, demand currently decreases

if you expect the sale the end net week, current demand will increase
direct relationship between current and future price

35
Q

direct relationship

A

between the price of one and the demand for the oter

36
Q

inverse relationship ex of milk and cereal

A

price of milk goes up, demand of cereal goes down

37
Q

Complementary goods

A

goods consumed together

ex: PB&J and cereal and milk

38
Q

complements in production are beef and leather

A

when the price of beef increases then the supply of leather will increase, this is a direct relationship

39
Q

E

A

changes in expectations (of sellers)

40
Q

N

A

Changes in the number of sellers

  • when the number of sellers increases, supply increases
41
Q

T

A

changes in technology

42
Q

SPENT - (W)

A

Weather can change supply

43
Q

SPENT - (T)

A

Taxes per unit

if taxes increases, supply decreases

44
Q

SPENT- (S)

A

Subsidy- per unit subsidy

if subsides increase, supply increases

45
Q

the only one will move along the curve line

A

price

46
Q

QD>QS

A

Shortage

47
Q

QS>QD

A

Surplus

48
Q

when demand increases then price and quantity

A

Increases

49
Q

price ceilings

A

legally established maximum price

50
Q

price floor

A

legally established minimum price

51
Q

price ceilings - binding and non binding

A

binding-shortage , nonbinding- nothing happens

52
Q

price flows- binding and non binding

A

binding- shortage, nonbinding- nothing happens

53
Q

binding graph

A
  • below equilibrium price

- always affects the market

54
Q

non binding graph

A
  • above equilibrium

- no shortage and no surplus

55
Q

unintended consequences of minimum wage laws

A

unemployment, reduced hours, reduced benefits, increased discrimination

aplys to binding only

Microeconomics (5 decks)

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