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econ quiz
econ quiz
52
Economics
12th Grade
02/08/2010

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Term
what is a subsity?
Definition
money given by the government
Term
what are the reasons for supply?
Definition
cost of inputs, productivity, tech., number of sellars, taxes, expectations, gov.reg.
Term
what are the reasons for demand?
Definition
taste, consumer income, subsitute, complement
Term
What does income and substitution effect both cause?
Definition
they cause a change in quantity demanded
Term
when graphing a change in supply/demand where does it shift on the graph when it is increasing?
Definition
to the right
Term
where does it shift on a graph in when change in supply and demand is decreasing
Definition
to the left
Term
a change in demand is never in response to a change in price of that product. T OR F?
Definition
TRUE
Term
Why does a change in quantity demanded happen?
Definition
because of a price change which is changed because of supply
Term
what happens on a change in QUANTITY (supplied or demanded) qraph?
Definition
There is NOT a new line but a new point on the existing line.
Term
what is the defference between substitution effect and income effect?
Definition
S.E. means that the price of YOUR good is changing and I.E. means that the price of the product is changing
Term
what happens in just a change in demand or supply graph?
Definition
a new line is created
Term
do the numbers on a demand schedule increase or decrease (going from to to bottom)
Definition
increase
Term
do the numbers on a supply schedule increase or decrease (going from top to bottom)
Definition
decrease
Term
does price increase or decrease on a supply and demand schedule?
Definition
decreases
Term
When looking at prices when does surplus or shortage begin to occur?
Definition
.01 above or below the original price
Term
what is the definition of demand?
Definition
the desire, ability, and willingness to but a product
Term
what are the three componets of demand?
Definition
Desire, ability to pay, and willingness
Term
in what direction does a demand curve slope?
Definition
down
Term
in what direction does a supply curve go?
Definition
up
Term
what is the law of demand?
Definition
the quantity demanded for an economic product varies with price
Term
what is marginal utility?
Definition
the extra usefulness derived from aquiring one or more units of a product
Term
what is diminishing marginal utility?
Definition
with each continous product, the utility becomes less
Term
when does a change in demand or supply take place?
Definition
when a new quantity is demanded or supplied at every price
Term
On a graph: when does the change in supply and/ or demand increase? decrease?
Definition
increase= shift to the right
decrease= shift to the left
Term
what reasons change a quantity demanded?
Definition
income effect and substitution effect
Term
how does a change in quantity look on a graph?
Definition
a new point is created on the existing line of supply or demand
Term
what are the 3 determanants of elaticity of demand?
Definition
can purchase be delayed?
are there adequate substitutes?
does the purchase require a large portion of income?
Term
what is the equation for demand elasticity?
Definition
P*Q of the higher number THEN P*Q of the lower number. if the 1st answer increases when compared to the 2nd answer it is elastic, if it decreases it is inelastic
Term
what is the definition of supply?
Definition
the offering of economic products for sale
Term
what is the law of supply?
Definition
the quantity supplied for an economic product varies directly with its price
Term
what is the definiton of elasticity of supply?
Definition
how responsive supply is to a price change
Term
what is the equation for elasticity of supply?
Definition
high quantity/low quantity AND high price/low price. if quantity is bigger=elastic if quantity is less=inelastic
Term
Price floors result in what?
Definition
surplus
Term
price celings result in what?
Definition
shortage
Term
in order for price celings or floors to be effective the must be ____________.
Definition
above or below equillibrium
Term
in order for price floor to be effective where does it have to be?
Definition
above equillibrium
Term
definition of elastic
Definition
quantity demanded or supplied is responsive to price change
Term
definition of inelastic
Definition
not very responsive to price change
Term
unit elastic
Definition
no change
Term
general markets are elastic or inelastic?
Definition
inelastic
Term
specific markets are inelastic or elastic?
Definition
elastic
Term
what does unit elastic mean
Definition
when quantity doesn't change when price changes
Term
what must be done to fix a surplus?
Definition
decrease price or supply
Term
when does a surplus occur?
Definition
when the price is too high
Term
what must be done to fix a shortage
Definition
increase price or supply
Term
price floors result in what?
Definition
surplus
Term
what reasons change a quantity demanded
Definition
income and substitution effect
Term
where is a price floor located
Definition
above equillibrium
Term
what causes a change in quantity
Definition
a change in price
Term
what changes in an income effect?
Definition
price
Term
what does inelastic mean?
Definition
a change in price but the product is still needed
Term
what is the difference between consumer income and income effect
Definition
CONSUMER INCOME: a change in demand and the income level is changing
INCOME EFFECT: it is a change in quantity demanded and the price of the product is changing
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