U1 AOS2 Post Progress Check 3 Flashcards
What is market equilibrium?
Market equilibrium is the state where the supply of goods matches demand, resulting in a stable market price.
Which of the following factors can disrupt market equilibrium? A) Changes in consumer preferences B) Government regulations C) Natural disasters D) All of the above
D) All of the above
What happens to the market price when there is excess demand?
The market price tends to rise.
What are the four main types of market structures?
Perfect competition, monopolistic competition, oligopoly, and monopoly.
True or False: In a monopoly, there are many sellers in the market.
False.
Fill in the blank: In a perfect competition market, firms are price __________.
takers.
Which market structure is characterised by a few firms that dominate the market?
Oligopoly.
What is a key characteristic of monopolistic competition?
Firms sell products that are differentiated from one another.
What does the production possibility curve (PPC) illustrate?
The PPC illustrates the maximum possible output combinations of two goods that an economy can produce given its resources and technology.
True or False: Allocative efficiency occurs when resources are distributed in a way that maximises consumer satisfaction.
True
What is the difference between productive efficiency and allocative efficiency?
Productive efficiency refers to producing goods at the lowest cost, while allocative efficiency refers to producing the right mix of goods to match consumer preferences.
What are the three sectors involved in the circular flow of income model?
Household sector, business sector, and government sector.
True or False: In the circular flow of income model, households provide factors of production to businesses.
True
Which sector collects taxes and provides public goods in the three sector circular flow of income model?
Government sector
What is the definition of diminishing marginal utility?
Diminishing marginal utility is the principle that as a person consumes more units of a good, the additional satisfaction (utility) gained from each additional unit decreases.
Which of the following best illustrates the concept of diminishing marginal utility? A) Eating one apple gives you 10 utils, and eating a second apple gives you 8 utils. B) Eating one apple gives you 5 utils, and eating a second apple gives you 5 utils.
A
What happens to consumer behavior when the marginal utility of a good becomes zero?
When the marginal utility becomes zero, consumers will no longer derive any additional satisfaction from consuming more of that good and may stop consuming it altogether.
