ECON UNIT 13
How does price affect our demand to buy something?
Because we are not going to buy something if it cost too much
Most well-known price floor? What is the federal minimum?
Minimum wage, 7.25
What are 3 ways the government helps a monopoly set up?
licences , granting patents, and franchising.
2 types of related goods with one example of each
tooth paste/toothbrush bread/penutbutter
If more goods/services are available than demanded, what is this called?
surplus
Price ceiling vs. price floor?
Price ceilings prevent a price from rising above a certain level. ... Price floors prevent a price from falling below a certain level.
What does a demand schedule show? What about a demand curve?
A demand schedule shows the quantities of demanded at various prices by all consumers and a demand curve is a graph representing demand schedule.
Pick 1 of the types of monopolies and explain. Be sure to give an example.
A natural monopoly is a market that runs most efficiently when one large firm provides all the output. 1 ex of this is the water company
What is a shortage?
A shortage is a situation in which demand for a product or service exceeds the available supply.
What is demand? How does the law of demand function?
Desire to own something and having the ability to pay for it.
Term for when the quantity supplied does not meet the amount demanded?
Disequilibrium occurs when. quantity supplied is equal to quantity demanded. quantity supplied does not equal quantity demanded.
Elastic vs inelastic demand
Elastic demand or supply curves indicate that quantity demanded or supplied respond to price changes in a greater than proportional manner. An inelastic demand or supply curve is one where a given percentage change in price will cause a smaller percentage change in quantity demanded or supplied
What is equilibrium? Where does it appear on a graph of supply and demand?
Equilibrium is a state in which market supply and demand balance each other
What kind of effect does price have on production of goods/services?
If prices are too high no one will buy that product while if the prices are low people will want to buy that product.
Explain 2 benefits of a price system.
It makes things fair and that people cant over price things that are important
3 conditions needed for pure competition
Large # of firms all produce essentially the same product Market is in equilibrium All firms sell the same product for the same price
When a market is at equilibrium, is it stable or unstable?
Stable
What are the 3 non-price determinants of supply?
Taxes, expectations, productivity.
Substitution effect vs. income effect-
The substitution effect is when prices go up on a product people will buy something else while the income effect is where if prices go up some people wont be able to buy it because of their income
ONE example found in our society that is close to pure competition
Trading stocks
2 big sources of advertising today?
Tv and the internet
What is meant by "imperfect competition?"
some firms have a advantage over others
2 common barriers to entry in a market?
start up cost, technology
What does elasticity of demand refer to?
is a measure of the change in the quantity demanded or purchased of a product in relation to its price change.
Normal goods vs inferior goods
normal goods are everyday goods that we buy, inferior goods increase in income causes demand for theses to fall.
What does an individual supply schedule show? What about a market supply schedule?
the show the price of the product, the demand and the quantity supplied
What is supply? How does the law of supply function?
total amount of a specific good or service that is available to consumers. The law of supply states that all other factors being equal, as the price of a good or service increases, the quantity of goods or services that suppliers offer will increase, and vice versa.
T or F: states can choose to raise minimum wage
true