Economics Exam 1 Flashcards
Unemployment due to changes in the types of skills employers require is called
Structural Unemployment
CPI=
Price of the basket/
Price of the basket base year
If there is no CPI for a given year then the CPI is
100
To find percentage change in real income you…
Calculate real income for both years
=nominal/CPI x 100
Subtract current RI by previous RI and divide by previous RI x 100
Unemployment that arises as a result of the time it takes for unemployed people to locate a job utilizing their transferable skills is called
Frictional Unemployment
How to find another’s years dollars worth….
- Calculate percent change in CPI
- Multiply percent by previous years worth of dollars
- Add the product to previous years worth of dollars
If tuition is set at 60$ there will be
A shortage at 10 a.m. And a surplus at 8 a.m.
The demand for seats in 10 a.m. Classes at the university is higher than the demand for the seats in 8 a.m. Classes. The supply is fixed. If the university prices classes at the price required to achieve equilibrium at 10 a.m., there will be
A surplus at 8 a.m.
To an economist, freeway congestion is a sign that the price to drive in the freeway is
Below its equilibrium level
If demand to attend college rises, but the tuition stays constant, it follows that the
GPA required to attend the college will probably rise
The lower the price of medical care in general, the higher the __________ medical care and the __________ specific items that makeup medical care
Quantity demanded of;higher the demand for
If the government sets out to make home buying easier for more people by driving lenders to accept __________ down payments and __________ interest rates, the result will likely be a(n) __________ in housing prices
Lower;lower;increase
If demand is fixed the line is
Perfectly Horizontal
If supply is fixed the line is
Perfectly Vertical
Law of demand states that price and quantity demanded are
Inversely related, ceteris paribus
Inferior Good
Income goes up, demand goes down
Income goes down, demand goes up
Normal good
As income increases, demand increases
As income decreases, demand decreases
Resource X is necessary to the production of good Y. If the price of resource X rises
The supply curve of Y shifts leftward
The fundamental reason why most supply curves are upward sloping is that
Higher production raises the opportunity costs of production and so price must rise to induce more output
At a price below equilibrium, there is
A shortage
If the supply of and demand for a product both decrease, then equilibrium
Quantity must decline, but equilibrium price may either, rise, fall, or remain unchanged
A rightward shift in supply from S1 to S2 could have been caused by
The granting of a subsidy to the producer
Neutral good
As income increases, you don’t but more of a good
As income decreases, you don’t buy less of a good
In year 1 the average price of X is $10, and in year 2 the average price of X is $23. Still consumers buy more units of X In year 2 than in year 2. It follows that
Demand for good X could be higher in year 2 than in year 1
Income may have been higher in year 2 than in year 1
