14-15 Economics Set 4 (P-V)

Question 1

describes an allocation in which the only way to make any individual or group of individuals better off would require making at least one other person worse off

Answer 1

Pareto efficiency

Question 2

literally per head, used to denote an average value for a population

Answer 2

per capita

Question 3

the use of the tools of economic analysis to describe and explain economic phenomena and to make predictions about what will happen under particular circumstances

Answer 3

positive economics

Question 4

the quantity of output that would be produced by an economy if all of its resources were being employed at normal rates

Answer 4

potential output

Question 5

when a business sells the same product to different buyers at different prices

Answer 5

price discrimination

Question 6

the amount by which demand for a given product changes in response to changes in price; specifically, the percentage change in demand that corresponds to a one percent change in the price

Answer 6

price elasticity of demand

Question 7

the difference between the price that producers receive for supplying a good and their marginal cost of producing it

Answer 7

producer surplus

Question 8

the practice of restricting production at a certain level and then dividing up and allocating the right to produce through a quota system, especially in U. S. oilfields of the first half of the twentieth century

Answer 8

prorationing

Question 9

when individual choices are made by comparing the benefits and costs of different actions and then selecting the action that produces the greatest benefit

Answer 9

rationality

Question 10

the production of goods and services valued at constant prices

Answer 10

real GDP

Question 11

a period between a peak and a trough in economic activity

Answer 11

recession

Question 12

a firm that is subject to government rules that allow it to operate as a monopoly, but often regulate its profit and price level, in theory to approximate the outcome of a competitive market

Answer 12

regulated monopoly

Question 13

the amount of reserves that the Federal Reserve requires banks to hold

Answer 13

reserve requirement

Question 14

the fraction of deposit liabilities that banks hold to meet depositor withdrawals

Answer 14

reserves

Question 15

an inescapable fact of human existence that results from the fact that the available resources are always less than our limitless desires

Answer 15

scarcity

Question 16

unemployment that results from the mismatch in skills, locations, or other important characteristics between job seekers and the available jobs

Answer 16

structural unemployment

Question 17

two goods for which an increase in the price of one leads to an increase in the demand for the other

Answer 17

substitutes

Question 18

the integrated majors, or world’s largest oil companies, which generally operate at every stage of the supply chain and are thus vertically integrated

Answer 18

supermajors

Question 19

a graphical representation of the quantity of a good or service supplied as a function of the price

Answer 19

supply curve

Question 20

a table showing the relationship between the price of a good or service and the quantity supplied

Answer 20

supply schedule

Question 21

the total revenue received by a supplier

Answer 21

total revenue

Question 22

the depletion of a common resource due to overuse

Answer 22

tragedy of the commons

Question 23

the state of actively seeking paid work but being unable to find it

Answer 23

unemployment

Question 24

the number of unemployed workers as a fraction of the total labor force

Answer 24

unemployment rate

Question 25

a cost of production that depends on the quantity produced

Answer 25

variable cost