ECO 155 Key Concepts Review

Now, Jon is in Japan, trying to get a job as a full-time translator; he wants to translate English TV shows into Japanese and vice versa. He notices that the wage for translators is very low. Who is the "competition" pushing the wage down: Does the competition come from businesses who hire the translators or from the other translators?

**Competition is the other translators

What's the best way to think about the rise in oil prices in the 1970s, when wars and oil embargoes wracked the Middle East? Was it a rise in demand, a fall in demand, a rise in supply, or a fall in supply?

**Fall in supply.

Jon is on eBay, bidding for a first edition of the influential Frank Miller graphic novel Batman: The Dark Knight Returns. In this market, who is Jon competing with: the seller of the graphic novel or the other bidders?

**Other bidders

What's the best way to think about the rise in oil prices in the last 10 years, as China and India have become richer: Was it a rise in demand, a fall in demand, a rise in supply, or a fall in supply?

**Rise in demand.

If the price in a market is above the equilibrium price, does this create a surplus or a shortage?

**Shortage

What happened in Vernon Smith's lab?

**The price and quantity were close to equilibrium and gains from trade were close to the maximum.

When the price is above the equilibrium price, does greed (in other words, self-interest) tend to push the price down or up?

**Up

Shortage

A situation in which the quantity demanded is greater than the quantity supplied.

Surplus

A situation in which the quantity supplied is greater than the quantity demanded.

Equilibrium Price

The price at which the quantity demanded is equal to the quantity supplied.

Equilibrium Quantity

The quantity at which the quantity demanded is equal to the quantity supplied.