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| Know that Marginal Cost is equal to? |
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Definition
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| The circular-flow diagram is a? |
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Definition
| Visual model of how the economy is organized. |
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| In the circular-flow diagram income from factors of production flows from? |
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Definition
| Income from factors of production flows from FIRMS to HOUSEHOLDS. |
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Which of the following concepts is NOT issustrated by the production possibilities frontier?
~ Efficiency
~ Opportunity Cost
~ Equity
~ Tradeoffs |
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Definition
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| On the Production Possibilities Frontier, An economy can produce at which points? |
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Definition
| Points that are on the ppf line or INSIDE the ppf. |
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| On the Production Possibilities Frontier, Which kind of points would be considered Inefficient? |
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Definition
| ONLY points that are inside the PPF. |
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| When a Production Possibilities Frontier shifts outward, it is demonstrating the concept of ? |
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Definition
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Term
| When the PPF shifts outward it is most likely caused by a ? |
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Definition
| Technology improvement in the production of one of the goods (mainly along the Y axis). |
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Term
| An example of a Positive Statement is ? |
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Definition
| Prices rise when the government prints too much money. |
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| A normative statement describes how the world ? |
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Definition
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| Comparative Advantage is based on? |
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Definition
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Definition
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| A good that is produced abroad and sold domestically is called ? |
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Definition
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Term
| A tax placed on imported goods is called? |
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Definition
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Term
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Definition
| Taxes placed on imported products. |
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Term
| What are Determinants of Demand? |
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Definition
~ Tastes
~ Income
~ The price of related goods |
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Term
| You lose your job and as a result you buy fewer mystery books. This shows that you consider mystery books to be a ? |
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Definition
| Normal good. Because you dont buy it when income changes. |
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Term
| If the price of a substitute to good X increases, then the ...? |
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Definition
| Demand for good X will increase. |
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Term
| Two goods are complements if a decrease in a the price of one good ....? |
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Definition
| Raises the demand for the other good. |
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Term
| Alyssa rents 5 movies per month when the price is $3.00 each and 7 movies per month when the price is $2.50. Alyssa has demonstrated the ....? |
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Definition
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Term
| A MOVEMENT along the supply curve might be caused by a change in ....? |
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Definition
| The price of the good or service. |
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Term
| A Technological advancement will shift the....? |
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Definition
| Supply curve to the Right. |
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Term
| If a good is a necessity, demand for the good would tend to be? |
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Definition
| Inelastic. Becuase no matter the price the demand for the good will remain becuase it is a necessity. |
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Term
| When quantity demanded responds SUBSTANTIALLY to changes in price, demand is said to be....? |
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Definition
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Term
| Suppose that good X has a negative income elasticity of demand. This implies that the good is....? |
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Definition
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Term
| Suppose that good x has a positive income elasticity of demand. That implies that the good is....? |
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Definition
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Term
| If the elasticity of supply is zero, then...? |
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Definition
| The Quantity Supplied is the same regardless of price. |
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Term
*True or False*
Goods with close substitutes tend to have more elastic demands than do goods without close substitutes. |
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Definition
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Term
*True or False*
When demand is inelastic, a decrease in price increases total revenue. |
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Definition
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Term
*True or False*
Normal goods have negative income elasticities of demand, while inferior goods have positive income elasticites of deamand. |
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Definition
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Term
| When her income increased from $10,000 to $20,000, Heathers consumption of macaroni decreased by 10 pounds to 5 pounds and her consumption of Soy-Burgers increased from 2 pounds to 4 pounds. We can conclude that for Heather,....? |
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Definition
| Macaroni is an inferior good with an income elasticity of -1 and Soy-Burgers are normal goods with an income elasticity of 1. |
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Term
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Definition
| It is a legal MINIMUM on the price at which a good can be sold. |
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Term
| If a price ceiling is NOT binding, then ....? |
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Definition
| The equilibrium price is BELOW the ceiling. |
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Term
| If a binding price ceiling is imposed in a market....? |
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Definition
| There will be a SHORTAGE in the market. |
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Term
| What is an example of a Price Floor? |
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Definition
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Term
| When government imposes price ceilings and floors in a market....? |
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Definition
| Price no longer serves as a rationing device. |
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Term
*True or False*
In general, a tax burden falls more heavily on the side of the market that is more elastic. |
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Definition
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Term
| When a PPF is negatively slopped it means that it is a ? |
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Definition
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Term
| Price > Equilibrium Price. What does this indicate? |
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Definition
~ Means there will be a surplus (excess supply)
~ Price Decrease |
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Term
| Price < Equilibrium Price. What does this indicate? |
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Definition
~ A shortage (excess demand)
~ Price Increase |
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Term
| In absolute value elasticity may vary from ... to ... ? |
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Definition
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Term
| Price elasticity of demand is ..... And Price of supple is ..... ? |
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Definition
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Definition
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Definition
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Definition
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Definition
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Definition
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Term
| Cross Elasticity is ..... for Substitution? |
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Definition
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Term
| Cross elasticity is ..... for Complements? |
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Definition
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Term
| For Normal goods, Income Elasticity is .....? |
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Definition
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Term
| For Inferior goods, Income elasticity is ....? |
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Definition
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Term
| Pertaining to the Demand and Supply Curve, The FLATTER it is the more .... it is? |
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Definition
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Term
*True or False*
Absolute Advantage and Comparative Advantage do NOT imply eachother? |
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Definition
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