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Economics > 1140 Q&B > Flashcards

1140 Q&B Flashcards

1
Q

Limited factors in a free-market economy include:

A

capital
labor
management
natural resources

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2
Q

The scarcity of the factors of production results in a scarcity of _______

A

goods

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3
Q

Consumption affects ______, which may increase or decrease when a product is selling well or when it is not.

A

price

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4
Q

Economists are interested in the ______, rather than the _____ of consumers

A

wants

needs

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5
Q

Consumers purchase goods and services that _______________

A

give them satisfaction

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6
Q

Rising prices do what three things?

A

encourage production because of the expectation of increased profits
notify financial institutions as to which businesses are good risks for capital loans
inform producers that they must increase the supply

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7
Q

A company that is not responsive to _____________ may experience failure and bankruptcy

A

consumer demand

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8
Q

consumer evaluation of alternatives is ______________

A

the basis of trade

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9
Q

___________ in a free-market system are determined by the interaction of supply and demand

A

Prices

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10
Q

Factors that influence demand are:

A 
the PRICE of the product or service
the URGENCY of the consumer's need
the SUPPLY of the product or service
the UTILITY of the product or service
consumer INCOME
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11
Q

A ____________ is a table listing amounts of a product consumers will purchase at various prices, in a specific market, and at a given point in time.

A

demand schedule

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12
Q

A ________ is a graph showing information from a demand schedule

A

demand curve

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13
Q

A demand schedule is limited because it:

A

shows a limited amount of selected prices

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14
Q

A demand curve illustrates that ____ varies inversely with _______ and shows the principle of ________________

A

demand
price
diminishing marginal utility

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15
Q

As long as only the price of a good or service changes, its demand curve ____________

A

stays the same

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16
Q

4 reasons for a shift in demand

A

a change in consumer income
a change in the price of alternative choices
a change in consumer expectations
a change in consumer tastes and preferences

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17
Q

demand has a negative slope

A

supply has a positive slope

18
Q

When the level of demand increases, :

A

the price level increases

19
Q

satisfied by only one price

A

elastic goods

20
Q

revenue remains the same whether the price increases or decreases

A

unitary goods

21
Q

supply can be influenced by:

A

cost of production
time
technology
price

22
Q

Short run- some production factors may be varied.

Long run-all

A

.

23
Q

_______ is the major influence on supply in the short run, while both _____________ and __________ are long run influences

A

Price
Cost of production
technology

24
Q

A change in supply is a change in the quantity at different ___________, but it is not a quantity change resulting in a ______________

A

price levels

change in price

25
Q

The ____________ is the price at which supply and demand are equal

A

equilibrium

26
Q

The market always tends toward

A

equilibrium

27
Q

Supply up demand same

A

price down

28
Q

supply down demand same

A

price up

29
Q

supply and demand increase or decrease equally

A

price same

30
Q

demand up more than supply

A

price up

31
Q

supply up more than demand

A

price down

32
Q

__________________ occurs when there is a period of perfect inelasticity of supply in which the supplier cannot expand production and the supply is fixed.

A

Instantaneous equilibrium

33
Q

A supply curve for instantaneous equilibrium is _________

A

vertical

34
Q

Short run represents __________, and long run equilibrium represents a more _______ supply

A

an inelastic supply

elastic

35
Q

The two most common floors in the US

A

minimum wage laws

agricultural price supports

36
Q

Surpluses and shortages are likely to occur when __________________ become a part of the market

A

government price controls

37
Q

For a good with an elastic demand, a price reduction results in a/an _______ in revenue, and a price increase results in a/an ________.

A

increase

decrease

38
Q

A free-market economy maximizes _________ and minimizes _____________

A

individual freedom

state coercion

39
Q

If demand increases more than supply,

A

both quantity and price increase

40
Q

if supply increases more than demand,

A

price decreases and quantity increases

Economics (12 decks)

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