Vocab 1

Question 0

Rationing

Answer 0

– an agency administered by the government decides what everyone’s fair
share is.

Question 1

Price

Answer 1

the monetary value of a product as established by the supply and demand. It helps the consumer to make economic decisions.

Question 2

Market Equilibrium –

Answer 2

prices are relatively stable and the quantity demanded is equal
to the quantity supplied

Question 3

Surplus –

Answer 3

producers feel the market demand for a product will be a certain price
however suppliers discover that consumers will only buy a certain amount a the price
set by the supplier thus resulting in a surplus of production

Question 4

Shortage –

Answer 4

suppliers feel a certain price is fair for a product however they discover
that consumers are willing to buy more of the product than is available at that price this
resulting is a shortage of production

Question 5

Equilibrium Price –

Answer 5

the price
that clears the market neither
a surplus nor a shortage

Question 6

Market Surplus –

Answer 6

the quantity 
supplied exceeds the quantity 
demanded resulting in a 
surplus of the quantity 
supplied

Question 7

Market Shortage –

Answer 7

the price results in a greater 
quantity demanded than 
the quantity supplied 
resulting in a shortage of 
the quantity supplied

Question 8

Natural monopoly

Answer 8

cost of production are minimized by a single producer. average cost of production falls as the company becomes larger

Question 9

Geographic Monopoly –

Answer 9

the absence of sellers in a particular area. The

only seller of a particular product in a small town.

Question 10

Technological Monopoly –

Answer 10

a patent is granted for a new or useful invention (20 years) . Art and literature protected by copyrights (lifetime of the artist plus 50 years)

Question 11

Government Monopoly –

Answer 11

products that private industry cannot adequately provide. Water, alcohol, weapons grade uranium

Question 12

Oligopoly

Answer 12

is a market structure where there are very few large sellers
that dominate a particular industry

Question 13

Price fixing –

Answer 13

an agreement to charge the same or similar prices for a
particular product. Prices are higher that would be charged under
normal competitive conditions

Question 14

Collusion –

Answer 14

a formal agreement to set prices or act in a cooperative

manner between or among firms in the same industry