Term
| How does the existence of the baby boom generation change demand in the US? |
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Definition
| Changes in the size of the population affect the demand for most products. This event led to higher demand for baby clothes, food, and books on proper care; new schools had to be built as this generation grew older. |
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Term
| what are some of the situations that make the market behave inefficiently? |
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Definition
| consumers are uninformed, imperfect competition, and spillover costs |
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Term
| on what kinds of goods do governments generally place price ceilings? |
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Definition
| government places these on some goods that are considered "essential" and might become too expensive for some consumers. |
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Term
| what is a basic principle of the law of demand? |
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Definition
| consumers buy more of a good when its price decreases and less when its price increases |
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Term
| What are some reasons why cartels are difficult to operate? |
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Definition
| members of these organizations must keep to its agreed output levels and no more; if not prices will fall and firms will lose profits. Members have strong incentive to cheat. |
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Term
| what is the effect of import restrictions on prices? |
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Definition
| this type of restriction would shift the supply curve to the left this would affect future expectations of prices |
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Term
| what are some examples of a good whose price goes down because of improvement in technology? |
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Definition
| this type of improvement is capable of destroying natural monopolies. All old out of date goods would decrease in price due to their lack of necessity. |
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Term
| what happens to a product or service when the government deregulates it? |
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Definition
| This product or service is removed from some government control; the government no longer decides what role the product can play in a market and how much it can charge consumers. |
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Term
| What are some effects that the internet has had on business? |
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Definition
| it reduced start up costs in many markets |
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Term
| Why did communist governments use a command economic system for many years? |
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Definition
| They hoped to distribute wealth evenly throughout their society |
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