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Animal Science > ECON 11 > Flashcards

ECON 11 Flashcards

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1
Q

Aka minimum price policy

A

FLOOR PRICE (Pf )

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2
Q

Examples of floor prices

A

minimum wages

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3
Q

causes a surplus in the market

A

Pf

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4
Q

Pf will not have an impact (ineffective) if

A

set below the equilibrium
price.

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5
Q

Aka maximum price policy

A

PRICE CEILING (Pc )

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6
Q

causes a
shortage in the market.

A

Pc

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7
Q

Pc will not have an impact (ineffective) if

A

set above the
equilibrium price.

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8
Q

meant to stabilize the prices of basic necessities, by
prescribing measures against undue price increases during
emergency situations…

A

Republic Act 7581 (The Price Act
of 1992)

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9
Q

If Y = f(X), the elasticity measures the

A

responsiveness of
Y to changes in X.

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10
Q

Elasticity indicates the percentage change in Y in response to
a ______________ change in X.

A

one percent

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11
Q

Formula of Elasticity

A

See your answer in messenger hahhahaa

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12
Q

measures the
responsiveness of quantity demanded of a good to
changes in its own price.

A

Own price elasticity of demand

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12
Q

measures the
responsiveness of quantity demanded of a good to
changes in its own price.

A

Own price elasticity of demand

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13
Q

Formula of Own price elasticity of demand

A

see sa pm

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14
Q

Two ways of estimating elasticity

A

Point and arc elasticity

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15
Q

elasticity is measured for a
single point on the demand curve

A

Point elasticity

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16
Q

computed using two points along
a demand curve

A

Arc elasticity

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17
Q

obtained if demand function is
known.

A

Point elasticity

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18
Q

Implemented if there are a limited number of
observations

A

Arc elasticity

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19
Q

Perfectly inelastic

A

= 0

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20
Q

Inelastic

A

<1

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21
Q

Unit elastic

A

= 1

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22
Q

Elastic

A

> 1

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23
Q

Perfectly elastic

A

infinite

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24
Q

quantity sold multiplied by the price

A

Total revenue (TR)

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24
Q

quantity sold multiplied by the price

A

Total revenue (TR)

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25
Q

responsiveness of the demand for a good to changes in the
price of another good

A

Cross-price elasticity of demand

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26
Q

Substitutes

A

exy > 0

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27
Q

Complements

A

exy < 0

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28
Q

measures the
responsiveness of the demand for a good to a change in
income.

A

income elasticity of demand

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29
Q

Two types of taxes:

A

specific/excise tax vs ad valorem tax

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30
Q

tax per unit of the product

A

Specific/excise tax

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31
Q

effects of government taxes on
consumption and production.

A

TAX INCIDENCE

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32
Q

increase in the equilibrium price is likely to be _____ _______the
amount of the tax.

A

Less than

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33
Q

T or F. Tax will raise the equilibrium price

A

True

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34
Q

True of False. the burden of the tax (Who pays for the tax?) is generally shared by producers and consumers.

A

True

35
Q

What is the case of specific tax when the specific tax shifts up the supply curve
by the amount that is equal to the tax.

A

Initial impact

36
Q

T or F. Incorporating the demand side shows that producers will
most likely be able to raise prices by the amount of the
tax.

A

False, unable

37
Q

T or F. Distribution of the tax burden depends on the own
price elasticity of demand.

A

T

38
Q

If demand is less price elastic, the burden of the tax is
likely to shouldered more by the _________.

A

consumers

39
Q

If demand is more price elastic, the burden of the tax is
likely to shouldered more by the __________.

A

producers

40
Q

tax is borne solely by the
consumers

A

Perfectly inelastic demand

41
Q

tax is borne solely by the producers

A

Perfectly elastic demand:

42
Q

Consumers still lose because they are able to buy less of
the good. T or F

A

T

43
Q

social science that deals with the
allocation of scarce resources to satisfy unlimited human wants.

A

Economics

44
Q

Systematic observation of natural events and
conditions in order to formulate laws and principles.

A

Science

45
Q

Seeks to explain events in a
reproducible way, and to use these reproductions to
make useful predictions.

A

Scientific method

46
Q

focuses on natural phenomena,
including biological life

A

Natural science

47
Q

Focuses on human behavior and
societies

A

Social science

48
Q

BRANCHES OF ECONOMICS

A

Microeconomics & Macroeconomics

49
Q

deals with the description and explanation of
economic phenomena.
Answers the question:“What is?”

A

Positive economics

50
Q

involves value judgements.
Answers the question: “What should be?”

A

Normative economics

51
Q

T or F. Not all positive statements are correct.

A

T

52
Q

All normative economics are correct. T or F.

A

False

53
Q

maximum amount a consumer will pay for an additional good or service

A

Marginal benefits

54
Q

________ _________questions capture the need to make choice

A

basic economic

55
Q

BASIC
ECONOMIC QUESTIONS

A

*What to produce?
*How much to produce?
*How to produce?
*For whom to produce?

56
Q

The _______ is a useful tool for illustrating the choices
available to society and its constraints

A

PRODUCTION POSSIBILITIES FRONTIER (PPF)

57
Q

demonstrates all the possible combinations
of the maximum amounts of two goods (or services)
that can be produced with a given amount of
resources

A

PRODUCTION POSSIBILITIES FRONTIER (PPF)

58
Q

refers to physical capital like machinery,
production plants, etc.

A

‘Capital’

59
Q

represents the value of the best foregone
alternative.

A

Opportunity cost

60
Q

does not really say what
specific technology or set of techniques are being used

A

Implied by position in PPF

61
Q

then we using the best technology available.

A

If on the PPF

62
Q

there might be unemployment or we are not
using the best technology or both

A

If inside the PPF

63
Q

2 extreme economic systems

A

Complete command economy & Completely unregulated market economy

64
Q

Decisions are made by “authorities”.

A

Complete command economy

65
Q

 Markets determined the answers to the questions.
 Markets defined in the next topic.

A

Completely unregulated market economy

66
Q

institution that facilitates transactions
between buyers and sellers

A

A market

67
Q

the various quantities of a good or service
that users/consumers are willing and able to buy.

A

Demand

68
Q

This asserts that the quantity demanded of a good (Qd) is
inversely related to its own price (P)

A

Law of demand

69
Q

The higher price of a good makes the consumption of a
competing good (substitute) more attractive.

A

Substitution effect

70
Q

When price increases, the consumer’s real income (or
purchasing power) falls and so he/she tends to buy less.

A

Income effect

71
Q

 This represents a movement along the same demand curve.
 Other factors held constant, this is caused by a change in the
own price of the good.

A

Change in quantity demanded

72
Q

-This is a shift in the entire demand curve.
-This is caused by changes in other factors affecting demand
other than the own price. (More details later)

A

oChange in demand

73
Q

Other factors which may affect demand

A

oPrices of related commodities
oConsumer incomes
oTastes and preferences
oNumber of consumers
oPrice expectations

74
Q

Higher income leads to higher demand (rightward shift in
the demand curve)

A

Normal goods

75
Q

Higher income leads to lower demand (leftward shift in the
demand curve)

A

Inferior goods

76
Q

refers to the quantities of a good or service that
producers/firms are willing and able to offer for sale.

A

Supply

77
Q

This states that quantity sold of a good or services is
positively related to its own price, ceteris paribus.
oHigher price means more goods/services will be sold.
oLower price means fewer goods/services will be sold.

A

Law of Supply

78
Q

This is a movement along the same supply curve
This is due solely to a change in (own) price of the
good.

A

Change in quantity supplied

79
Q

This is a shift in the entire supply curve
This is caused by changes in factors other than the
price of the good (more details later).

A

Change in supply

80
Q

Other factors affecting supply

A

oPrices of resources/inputs
oPrices of related commodities
oTechnology
oNumber of producers
oProducer expectations

81
Q

Resources can be used to produce several types of goods

A

OFAS: Prices of related goods in production

82
Q

is a state in which the quantities that firms
want to sell is equal to the quantities that users want to buy.

A

Market equilibrium

83
Q

is state of rest.

A

Equilibrium

84
Q

Equilibrium condition:

A

Qs = Qd

85
Q

Scenario 1: Price above P*
oIn this scenario, Qs > Qd .

A

surplus or excess supply

86
Q

Scenario 2: Price below P*
oIn this scenario, Qs < Qd

A

shortage or excess demand

Animal Science (20 decks)

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