ECONOMICS 202
producing more of one good means less of another good can be produced.
Economic Trade Off
firms produce goods and services at the lowest cost.
Productive efficiency
When the price of a good rises, consumers buy a smaller quantity because of the ________ effect and the ________ effect.
Substitution and income
Which of the following is a microeconomics question?
What factors determine the price of carrots?
The three fundamental questions that any economy must address are:
What goods and services to produce, how will these goods and services be produced, and who receives them?
Holding everything else constant, an increase in the price of MP3 players will result in
a decrease in the quantity of MP3 players demanded.
What does the term "marginal" mean in economics?
an addition or extra
The revenue received from the sale of ________ of a product is a marginal benefit to the firm.
an additional unit
Which of the following will not shift the demand curve for a good?
an increase in the price of the good
Economists assume that individuals
are rational and respond to incentives.
if transactions costs are low, private bargaining will result in an efficient solution to the problem of externalities.
coase theorem
The difference between the highest price a consumer is willing to pay for a good and the price the consumer actually pays is called
consumer surplus
the reduction in economic surplus resulting from not being in competitive equilibrium.
deadweight loss
the study of the choices people make to attain their goals, given their scarce resources.
economics
At equilibrium, quantity demanded equals quantity supplied.
equilibrium in a market
economic benefits are distributed fairly.
equity
a benefit or cost experienced by someone who is not a producer or consumer of a good or service.
externality
one who waits for others to produce a good and then enjoys its benefits without paying for it
free rider
In economics, tangible merchandise is referred to as
good
In economics, the accumulated skills and training that workers have is known as
human capital
represented by a rightward shift of the demand curve
increase in demand
represented by a movement along a given demand curve
increase in quantity demanded
If the Apple Watch and the Samsung Gear S2 are considered substitutes, then, other things equal, an increase in the price of the Apple Watch will
increase the demand for the Gear S2.
A carbon tax which is designed to reduce pollution is an example of a
market based policy
The demand by all the consumers of a given good or service is the ________ for the good or service.
market demand
quantity demanded equals quantity supplied.
market equilibrium
Pharmaceutical manufacturers should not be allowed to patent their products so prescription drugs would be more affordable.
normative statement
In a modern mixed economy, who decides what goods and services will be produced?
only producers, consumers, and the government
All of the following are part of an economic model except
opinions
The highest valued alternative that must be given up to engage in an activity is the definition of
opportunity cost
Who receives the most of what is produced in a market economy?
people who earn the highest incomes
Economic models do all of the following except
portray reality in all its minute details.
Scarcity necessitates that people make trade-offs.
positive statement
Rent control is an example of
price ceiling
the economic cost of using a factor of production is the alternative use of that factor that is given up.
principal of opportunity cost
if all resources are fully and efficiently utilized, more of one good can be produced only by producing less of another good
production possibilities frontier model
the product's demand curve crosses the product's supply curve.
products equilibrium price
the difference between revenue and cost.
profit
a limit placed on the quantity of goods that can be imported into a country.
quota
In economics, activities done for others, such as providing house cleaning or dental work, are referred to as
services
is a table that shows the relationship between the price of a product and the quantity of the product supplied.
supply schedule
A change in all of the following variables will change the market demand for a product except
the price of the product
The law of demand implies, holding everything else constant, that as the price of bagels increases
the quantity of bagels demanded will decrease
If in the market for peaches the supply curve has shifted to the left
the supplies of peaches had decreased
Marginal analysis involves undertaking an activity
until its marginal benefits equal marginal costs.
When the federal government orders firms to use particular methods to reduce pollution, it is said to be using
Command and control policies
the economy is the study as a whole
Macroeconomics
a group of buyers and sellers of a product and the arrangement by which they come together to trade.
Market Economy
study of how households and firms make choices.
Microeconomics
Which of the following is a macroeconomics question?
What determines the inflation rate?