1140 Q&B Flashcards
Limited factors in a free-market economy include:
capital
labor
management
natural resources
The scarcity of the factors of production results in a scarcity of _______
goods
Consumption affects ______, which may increase or decrease when a product is selling well or when it is not.
price
Economists are interested in the ______, rather than the _____ of consumers
wants
needs
Consumers purchase goods and services that _______________
give them satisfaction
Rising prices do what three things?
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
A company that is not responsive to _____________ may experience failure and bankruptcy
consumer demand
consumer evaluation of alternatives is ______________
the basis of trade
___________ in a free-market system are determined by the interaction of supply and demand
Prices
Factors that influence demand are:
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
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.
demand schedule
A ________ is a graph showing information from a demand schedule
demand curve
A demand schedule is limited because it:
shows a limited amount of selected prices
A demand curve illustrates that ____ varies inversely with _______ and shows the principle of ________________
demand
price
diminishing marginal utility
As long as only the price of a good or service changes, its demand curve ____________
stays the same
4 reasons for a shift in demand
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
demand has a negative slope
supply has a positive slope
When the level of demand increases, :
the price level increases
satisfied by only one price
elastic goods
revenue remains the same whether the price increases or decreases
unitary goods
supply can be influenced by:
cost of production
time
technology
price
Short run- some production factors may be varied.
Long run-all
.
_______ is the major influence on supply in the short run, while both _____________ and __________ are long run influences
Price
Cost of production
technology
A change in supply is a change in the quantity at different ___________, but it is not a quantity change resulting in a ______________
price levels
change in price
The ____________ is the price at which supply and demand are equal
equilibrium
The market always tends toward
equilibrium
Supply up demand same
price down
supply down demand same
price up
supply and demand increase or decrease equally
price same
demand up more than supply
price up
supply up more than demand
price down
__________________ occurs when there is a period of perfect inelasticity of supply in which the supplier cannot expand production and the supply is fixed.
Instantaneous equilibrium
A supply curve for instantaneous equilibrium is _________
vertical
Short run represents __________, and long run equilibrium represents a more _______ supply
an inelastic supply
elastic
The two most common floors in the US
minimum wage laws
agricultural price supports
Surpluses and shortages are likely to occur when __________________ become a part of the market
government price controls
For a good with an elastic demand, a price reduction results in a/an _______ in revenue, and a price increase results in a/an ________.
increase
decrease
A free-market economy maximizes _________ and minimizes _____________
individual freedom
state coercion
If demand increases more than supply,
both quantity and price increase
if supply increases more than demand,
price decreases and quantity increases
