Additional Questions Flashcards
What is microeconomics?
the fair and equitable distribution of resources among consumers
National market
the domestic marketplace for goods and services operating within the borders of and governed by the regulations of a particular country
Single market
a group of countries that have an agreement which allows goods to be moved, bought, or sold between them very easily
What is not a an example of a perfectly competitive market?
diamond market.
-because each individual producers can influence the price
When supply increases, the supply curve
shifts to the right
What causes the demand curve to shift?
- Decrease in price of a substitute.
- Decrease in income if good is normal.
- Increase in price of a complement.
- Increase in income if good is inferior good.
Difference between shift in the supply curve vs a movement along the supply curve
shift- changes in supply determining variables such as production costs
Movement along- price changes
Why is the long-run price elasticity of supply is larger than the short run elasticity
in the short run, some firms may be constrained by their productive capacity
why do long run elasticities of demand differ from short run
- it takes time for people to change their consumption habits
- durable goods last a long time
Cyclical industries
manufactures products who demand fluctuate sharply in response to short run changes in income
most industries, supply is ____ in the short run than the long run
less elastic
excess demand implied by the shortages will depend on
the elasticities of supply and demand, where the shortages will be larger if both supply and demand are more elastic
demand for labour
product demand schedule, tech, labour supply remained constant but the supply of capital changed and fell by 50%, what would happen to demand of labour?
impossible to determine without knowing more info about the scale and substitution effect
(impossible for supply as well)
critical assumption economists make about the relationship between the quantity of labour hired and the marginal product of labour is
MPL diminishes as additional units of labour are added to the production process
monopsony
one buyer
Monopsonistic labour market
marginal expense of labour curve lies above the labour supply curve
Monopsonist pays a wage
lower than the wage determined in a competitive labour market
Internal labour market
workers are hired into relatively low level jobs and higher level jobs are filled only from within the firm.
constraints the employment relationship
officially unemployed
-15 or older and seeking employment
Greatest percentage reduction in employment since 1900
agriculture
Not an example of payment of in-kind to an employee?
Christmas bonus of 100 cash.
because it’s cash
represents the supply side of the labour market
workers and potential workers
equilibrium pice fell but equilibrium quantity increased, what might have caused this?
- supply and demand both shifted right, the magnitude of the supply shift was greater
price ceiling can result in a net loss in consumer surplus when _ and the curve is _. Also must recall than effective price ceiling causes a loss of _
1) demand
2) very inelastic
3) producer surplus for sure and possibly consumer surplus as well
