Flashcards in unit 2 test Deck (49):
A system of allocating scarce goods and services using some criteria other than price?
Why did Communist governments use a command economic system for many years?
in an attempt to create a society in which everyone was equal
A sudden lack of goods
When quantity supplied is more than quantity demanded
The price ceiling that was used to control the price of housing in NYC and other cities was called
The point at which quantity supplied and quantity demanded are the same
What is the name of the least amount that legally may be paid to most workers for an hour of work?
What happens to a market in equilibrium when there is an increase in supply?
quantity supplied will exceed quantity demanded, so the price will drop
What happens when the supply of a nonperishable good is greater than what consumers want to buy?
either the good remains unsold or the price drops
Situation in which quantity demanded is greater than quantity supplied
A minimum price for a good or service
When quantity supplied and quantity demanded are not the same in a market?
When quantity demanded is more than quantity supplied?
On what type of goods do governments generally place price ceilings?
those that are essential but too expensive for some people
What happens when wages are set by law above the equilibrium level?
Firms employ fewer workers than they would at the equilibrium wage
When buyers will purchase exactly as much a suppliers are willing to sell, what condition has the market reached?
What are inferior goods?
goods for which the demand falls when income rises
What kind of system is the US economy based on?
Ceteris Paribus, or “all things held constant” is an assumption that has which of the following effects on a demand schedule?
it takes only prices into account
What does it mean when the demand for a product is in elastic?
the price has no affect on demand
What factor has the greatest influence on elasticity and inelasticity of supply?
What does unitary elastic mean?
the percentage change in quantity demanded is exactly equal to the percentage change in price
How does a company arrange to sell its products to people who are unwilling to pay the top price for them?
by charging different prices according to the group to which the buyer belongs
How is current demand related to future price?
if the price is expected to drop, current demand will fall
Which of the following is a situation that makes the market believe inefficiently?
when consumers do not have enough info to make good choices
How is the future price related to the current demand
if price is expected to rise, current demand will rise
what determines how a change in prices will affect the total revenue for a company?
elasticity of demand
What is a basic principle of the law of demand?
when a goods price is lower, people will buy more of it
when the selling price of a good goes up, what is the relationship to the quantity supplied?
it becomes practical to produce more goods
Which of the following is NOT a form of nonprice competition?
which of the following is an example of a good with an inelastic supply?
Which of the following is a good that might not be bought when prices rise?
What do sellers do if they expect the price of goods they have for sale to increase dramatically in near future?
store the goods until the price rises
Which of the following receives government subsidies that are in place to protect the population rather than for economic reasons?
small farmers in France
A shift in the demand curve means which of the following?
a decrease in both price and quantity demanded
What shows the quantities of products demanded at each price by all consumers in a market?
a market demand schedule
How did the existence of the baby boom generation change demand in the united states?
Demand was raised for different goods with each age the baby boomers reached
What kind of changes would be expected in demand of a country that has an increasing population?
a rise in demand for shelter
A good that replaces another demanded good
When prices rise, what happens to income?
it buys less
A graphic representation of the quantities of a good that will be bought at each price?
The change in consumption resulting from a change in real income
what kind of tables lists the quantity of a good that an individual person will buy at different prices?
when a consumer is able and willing to buy a good or service s/he creates
What determines the price and the quantity produced of most goods?
interaction of supply and demand
Demand for movie rentals is highly elastic. A video store that raises the price of a rental will
What is the effect of import restrictions on prices?
rise in price
Which of these are most likely to lead to black market?