Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Principles of Microeconomics > Exam 1 Material > Flashcards

Exam 1 Material Flashcards

1
Q

economics

A

study of rational choice under conditions of scarcity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

scarcity

A

when people have more wants than what are freely available

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

rational choice

A

people make choices after comparing the benefits and costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

opportunity cost

A

the value of the next best alternative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

positive economics

A

predictive and/or descriptive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

normative

A

judgmental and/or evaluative

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

scientific method

A

ask questions, produce explanations, and form hypotheses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

microeconomics

A

is the study of the decision-making process of individuals

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

macroeconomics

A

is the study of aggregate decision-making

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

nominal variables

A

measured in terms of dollars

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

real variables

A

measured in terms of goods and services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

scatter diagram

A

collection of points showing the relationship between two variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

direct relationship

A

two variables that move in the same direction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

positive slope

A

a line that has a direct relationship between the variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

formula for a linear relationship

A

y= a + b*x

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

rise over run

A

slope of a linear line

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Demand

A

Behavior of consumers in a market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Determinants of Demand

A

price of the good, price of substitute goods, price of complementary goods, tastes and preferences, consumer’s income, and expectations about the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Ceteris paribus (latin phrase)

A

all other things equal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Demand function

A

mathematical relationship that predicts the quantity of a good demanded as a function of several related variables

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Qd=

A

D(P, Pc, Ps, M, Ta, Ex)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Normal good

A

Increase in income leads to an increase in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Inferior good

A

Increase in income leads to a decrease in demand

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Tastes and Preferences

A

If tastes for a product change, demand for that product changes in the same direction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

If prices are expected to rise in the future, demand will ____ today

A

increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

If future prices are expected to decrease, demand will ____ today

A

decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

For a normal good, if income decreases then

A

demand will decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

For an inferior good, if income decreases then

A

demand will increase

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

A demand schedule

A

a table showing the relationship between the price of a good and the quantity of the good demanded, ceteris paribus.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

A demand curve

A

is a graph showing the relationship between the price of a good and the quantity of the good that consumers are willing and able to purchase in a given period of time, ceteris paribus.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

The behavior of price and quantity demanded is called the

A

Law of demand

32
Q

A change in the price of a good results in a

A

change in the quantity demanded

33
Q

A change in the price of a good is shown (on a graph) by a

A

movement along the demand curve.

34
Q

On a graph, a change in demand is represented by a

A

Shift in the demand curve

35
Q

According to the law of demand, the price of a good and the quantity demanded have

A

an inverse relationship

36
Q

When the price of a good changes, the demand curve

A

never shifts

37
Q

A change in demand is caused by

A

changing a variable other than price

38
Q

Substitute goods are goods that

A

can be purchased instead of the original good because they satisfy the same needs

39
Q

Complementary goods are goods that

A

are closely related to the original and used with the original gods

40
Q

If the price of bagels falls, the consumer would demand ____ bread

A

less

41
Q

If the price of cheese falls, the demand for bread will

A

increase

42
Q

When there is a change in demand, the demand curve ___

A

shifts

43
Q

The beer, Natural Light, is probably a(n) ____ good

A

inferior

44
Q

When you change any of the factors that influence demand, except price, you will cause a

A

change in demand

45
Q

Are most goods normal or inferior?

A

Normal

46
Q

If the price of oil is expected to increase in the future, current demand will

A

increase

47
Q

The determinants of supply are:

A

price of the product, the price of input goods used to make it, the state of the industry’s technology, government taxes and subsidies, and expectations about the future price of the good

48
Q

Profit

A

is the difference between revenue and costs

49
Q

Supply

A

is the amount of a good that a producer puts on the market for any time period.

50
Q

The opportunity cost for a producer

A

is what the producer has to give up in order to produce

51
Q

Law of Supply is illustrated by

A

the supply curve

52
Q

Law of Demand is illustrated by

A

the demand curve

53
Q

When there is a change in the price of the good, the supply curve does not shift, but there is

A

movement along the supply curve

54
Q

If input prices increase, then supply of the good

A

decreases

55
Q

If input prices decrease, then supply of the good

A

increases

56
Q

Only if the supply curve shifts is there a ____ in supply

A

change

57
Q

If technology improves then

A

supply of the good increases

58
Q

If produces expect the future price of bananas to increase, then

A

the current supply of bananas will decrease

59
Q

If producers expect the future price of salt to decrease, then

A

the current supply of salt will increase

60
Q

Excess demand is when

A

consumers demand a greater quantity of a good than producers supply

61
Q

Excess supply is when

A

producers supply a greater quantity of a good than consumers demand

62
Q

Competitive equilibrium

A

exists when the market finds a price/quantity combination from which there is no incentive to move

63
Q

Excess demand occurs when price is

A

lower than the equilibrium price

64
Q

excess supply occurs when price is

A

higher than the equilibrium price

65
Q

How many comparative statics situations to study?

A

4 (demand increases or decreases; supply increases or decreases)

66
Q

If good X and Y are substitutes, then an increase in the price of good X will cause the price and quantity of good Y to

A

price and quantity of good Y will increase

67
Q

A weak demand and a strong supply would necessarily result in:

A

a lower price

68
Q

A drought that destroys half of the corn crops in the Midwest would cause:

A

a higher equilibrium price and a lower equilibrium quantity.

69
Q

If beer and pizza are complements, a decrease in the price of pizza would increase the demand for beer.

A

true

70
Q

If a product’s supply curve shifts outward, the new equilibrium quantity will be ________, and the new equilibrium price will be ________.

A

higher; lower

71
Q

When there is excess supply in a market:

A

there is downward pressure on the price

72
Q

When there is excess demand in a market:

A

there is upward pressure on the price.

73
Q

The market for bread is experiencing a surplus. You could predict that:

A

price will decrease, quantity demanded will rise, and quantity supplied will fall.

74
Q

If a change in the price of jelly beans has affected the chocolate bar market, the new point of equilibrium for chocolate bars occurs where:

A

the original supply curve intercepts the new demand curve.

75
Q

An increase in the demand for chocolate bars results in:

A

a price increase and a quantity increase.

76
Q

Assume that jelly beans and candy bars are substitute goods. If the price of jelly beans increases, the demand curve for jelly beans will shift inward.

A

false

Principles of Microeconomics (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions