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Flashcards in unit 2 test Deck (49):
1

A system of allocating scarce goods and services using some criteria other than price?

rationing

2

Why did Communist governments use a command economic system for many years?

in an attempt to create a society in which everyone was equal

3

A sudden lack of goods

supply shock

4

When quantity supplied is more than quantity demanded

excess supply

5

The price ceiling that was used to control the price of housing in NYC and other cities was called

rent control

6

The point at which quantity supplied and quantity demanded are the same

equilibrium

7

What is the name of the least amount that legally may be paid to most workers for an hour of work?

minimum wage

8

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

9

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

10

Situation in which quantity demanded is greater than quantity supplied

Shortage

11

A minimum price for a good or service

price floor

12

When quantity supplied and quantity demanded are not the same in a market?

disequilibrium

13

When quantity demanded is more than quantity supplied?

excess demand

14

On what type of goods do governments generally place price ceilings?

those that are essential but too expensive for some people

15

What happens when wages are set by law above the equilibrium level?

Firms employ fewer workers than they would at the equilibrium wage

16

When buyers will purchase exactly as much a suppliers are willing to sell, what condition has the market reached?

equilibrium

17

What are inferior goods?

goods for which the demand falls when income rises

18

What kind of system is the US economy based on?

Market

19

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

20

What does it mean when the demand for a product is in elastic?

the price has no affect on demand

21

What factor has the greatest influence on elasticity and inelasticity of supply?

time

22

What does unitary elastic mean?

the percentage change in quantity demanded is exactly equal to the percentage change in price

23

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

24

How is current demand related to future price?

if the price is expected to drop, current demand will fall

25

Which of the following is a situation that makes the market believe inefficiently?

when consumers do not have enough info to make good choices

26

How is the future price related to the current demand

if price is expected to rise, current demand will rise

27

what determines how a change in prices will affect the total revenue for a company?

elasticity of demand

28

What is a basic principle of the law of demand?

when a goods price is lower, people will buy more of it

29

when the selling price of a good goes up, what is the relationship to the quantity supplied?

it becomes practical to produce more goods

30

Which of the following is NOT a form of nonprice competition?

discounts

31

which of the following is an example of a good with an inelastic supply?

apples

32

Which of the following is a good that might not be bought when prices rise?

luxury

33

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

34

Which of the following receives government subsidies that are in place to protect the population rather than for economic reasons?

small farmers in France

35

A shift in the demand curve means which of the following?

a decrease in both price and quantity demanded

36

What shows the quantities of products demanded at each price by all consumers in a market?

a market demand schedule

37

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

38

What kind of changes would be expected in demand of a country that has an increasing population?

a rise in demand for shelter

39

A good that replaces another demanded good

substitute

40

When prices rise, what happens to income?

it buys less

41

A graphic representation of the quantities of a good that will be bought at each price?

demand curve

42

The change in consumption resulting from a change in real income

income effect

43

what kind of tables lists the quantity of a good that an individual person will buy at different prices?

demand schedule

44

when a consumer is able and willing to buy a good or service s/he creates

demand

45

What determines the price and the quantity produced of most goods?

interaction of supply and demand

46

Demand for movie rentals is highly elastic. A video store that raises the price of a rental will

gain/lose revenue

47

What is the effect of import restrictions on prices?

rise in price

48

Which of these are most likely to lead to black market?

Rationing

49

In response to rising car traffic....

a rise in price for bicycles