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Academic Decathlon > economics 301-375 > Flashcards

economics 301-375 Flashcards

1
Q

For a price ceiling to achieve its purpose, it must be imposed (above or below) market equilibrium

A

below

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2
Q

For a price floor to achieve its purpose, it must be imposed (above or below) market equilibrium

A

above

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3
Q

A shortage is a normal result of a price (floor or ceiling)

A

ceiling

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4
Q

If the government sets a minimum exchange price above market equilibrium, resulting in a quantity supplied in excess of quantity demanded, what has been imposed?

A

a price floor

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5
Q

If the government sets a maximum exchange price below market equilibrium, resulting in a quantity demanded in excess of quantity supplied, what has been imposed?

A

a price ceiling

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6
Q

What effect does a price floor set below the equilibrium price have on market?

A

none

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7
Q

prices go up on demidec CDROM software, and overall revenue stays the same. this means that demand is=n this price range is…

A

unit elastic

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8
Q

the price of one good goes up. as a result, the demand for another good decreases. what is the relationship of the two goods?

A

the two goods are complements

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9
Q

if demeand for a good is relatively inelastic, then an increase in price will

A

have little effect on quantity demanded

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10
Q

if price elasticity is less than one, then demand is

A

inelastic

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11
Q

demand increases and supply decreases. what happens to equilibrium price

A

increases

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12
Q

what are substitute goods?

A

goods that can replace one another or that are made with essentially the same resources

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13
Q

what are complementary goods

A

goods that are purchased together sch that the demand for one can directly affect the demand for the other. the classic exanple: hot dogs and hot dog buns

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14
Q

demand decreases. what happens to equilibrium quantity & price

A

decreases

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15
Q

demand increases and supply increases. what happens to equilibrium price

A

the change is indeterminate

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16
Q

the number of remote control producers shrinks. the supply of remote controls…

A

decreases

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17
Q

remote control producers learn that due to government intervention, the price of remote controls will increase in four weeks. short term supply….

A

decreases

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18
Q

what is the difference between a superior good and a normal good?

A

nothing- they are the same

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19
Q

explain the budget constraint

A

consumers are forced to sacrifice some wants for others because of limited income

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20
Q

what is a durable good

A

a good for which consumers have more elastic demand. if income changes or prices rise, consumers can reasonably hold off on buying durable goods, such as yachts, houses cars

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21
Q

after competition, what happens to demand for flashcards?

A

it decreases

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22
Q

when a person’s income goes up, he buys more tomatoes. tomatoes are what kind of good?

A

normal or superior goods

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23
Q

in which type of economic system are consumers free to buy anything they can afford?

A

a pure market system

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24
Q

what type of incentive is an individuals right to private property

A

positive and non monetary

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25
Q

prior to 1978 what type of of economic system was in place in china?

A

a mostly command system

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26
Q

what is market power?

A

a firms ability to raise prices without losing customers

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27
Q

in which type of economic system are sellers free to produce and sell anything they expect to be profitable

A

a pure market system

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28
Q

in a command economy, who or what answers the question of “who will receive the benefits of production?”

A

a central authority

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29
Q

in a mixed market economy, how is the question “what to produce” answered?

A

by a combination of central authority and market forces

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30
Q

what type of economic system was in place in the former soviet union?

A

a centrally-planned system

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31
Q

what are the three main types of economic systems?

A

traditional, planned/command, and mixed market systems

32
Q

since 1978 what has been the general nature of the changes in chinas economic system?

A

the government has begun to relinquish some of its strict control and allow an increasing amount of market-oriented economic activity

33
Q

what kind of of industry is most likely to be a target of economic regulation?

A

any industry in which a monopoly seems possible or desireable

34
Q

what is a concentrated industry?

A

an industry in which only a few firms are responsible for the majority of sales

35
Q

(Absolute/Comparative) advantages depend on relative costs.

A

comparative (Economics by Paul Samuelson, p835)

36
Q

In a market economy, who or what answers the question of “who will receive the benefits of production”?

A

market forces

37
Q

What type of economic system is in place in North Korea?

A

a mostly command system

38
Q

What are the three basic economic questions that every system must answer?

A

What to produce (and in what quantity)? For whom to produce? How to produce?

39
Q

What is the most competitive kind of pure economic system?

A

a market system

40
Q

In a command ecnomy, how is the question of “what to produce” answered?

A

by a central authority

41
Q

In which type of economic system are all resources owned by the public?

A

a command/planned system

42
Q

In a market economy, what is a firm’s incentive to eliminate competition?

A

to increase market power

43
Q

In which type of economic system do individuals have government protection for their rights to private property?

A

a mixed market system

44
Q

In a mixed market economy, who or what answers the question of “who will receive the benefits of production”?

A

either by a central authority or by market forces

45
Q

What is the least competitive kind of our economic system?

A

a command/planned economic system

46
Q

What type of economic system is in place in India?

A

a mixed market system, largely based on tradition

47
Q

what is the intended consqeuence of a decision?

A

the desired result of a decision; the reason the decision is made

48
Q

what is the unintended consequence of a decision?

A

the unwanted and inexpected result of a decision

49
Q

what would cause an economic decision to be difficult to make?

A

if there were only a small difference between the benefits and the costs of the alternatives

50
Q

what is the present consequence of a decision?

A

the result that happens when the decision us made or soon afterwards

51
Q

what type of consequences would a president facing reelection MOST be concerned with in regards to his actions?

A

the present consequences

52
Q

what two factors of production are non human resources?

A

land and capital

53
Q

what is a trade off

A

a decision to give up something in order to have something else

54
Q

what is the basic economic problem

A

scarcity

55
Q

in a market economy who or what answers the question of how to produce

A

either by a central authority or by market force

56
Q

in a command economy who or what answers the question of how to produce

A

a central authority

57
Q

do economists think people act out of self interest

A

yes

58
Q

many production possibilties frontiers compare the production of capital and ……. goods

A

consumer

59
Q

true or false- self interest is the same as selfishness

A

FALSE

60
Q

self interest is a result of the value of (public/private) property

A

private

61
Q

when a nation moves from one point on its production possibilities curve

A

not all resources are being used efficiently the economy could produce more but it is not doing so

62
Q

describe the shape of a production possibility curve for two goods that use the same productive inputs

A

a straight line

63
Q

why does the production possibility curve have a downward slope

A

any increase in the production of one good decreases the production of the other

64
Q

the trade off between guns and ….. is often used to refer to the choice between military and civilian goods

A

butter

65
Q

how does the law of increasing opportunity cost affect the shape of a typical production possibilities curve

A

it causes it to bow outward

66
Q

a graph that shows all the combinations of guns and butter that a nation can produce is an example of what type of curve

A

a production possibility curve

67
Q

typically, a nation’s production possibility curve is bowed (inward/outward)

A

outward

68
Q

the production possibility curve us bowed outward due to the law of (increasing/decreasing) opportunity costs

A

increasing

69
Q

if the production possibilities of two goods can be represented graphically as a straight line what can we infer about the relationship between the two?

A

the two goods use the exact same combination and amount of productive inputs

70
Q

the supply curve shiftsto the left. is there more or less produced at any given price?

A

less

71
Q

true or false- a change in the price of substitute goods changes demand for a good

A

TRUE

72
Q

the slope of the demand curve is

A

negative

73
Q

what is a non durable good?

A

a good for which the consumers have mainly inelastic demand. although income may change or prices may rise, consumers cannot sacrifice many non-durable goods

74
Q

the prices of substitutes and complementary goods affect the (supply/demand) for a good

A

demand

75
Q

cost of production affect (supply/demand) in the market for a good

A

supply

Academic Decathlon (35 decks)

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