Pt. 1 Econ Flashcards
The main determinant of the elasticity of demand for a product is the:
availability of substitutes for the product
Which of the following developments is the most likely consequence of a decrease in the foreign exchange value of the U.S. dollar?
U.S. manufacturers will increase their sale of goods in foreign markets.
This is the dollar value of all final goods and services and the most comprehensive measure of a country’s total production output.
gross domestic product (GDP)
An economy at its production possibilities frontier is operating at this.
full potential
If a modest price increase has little or no effect what type of demand does the product have?
Inelastic demand
When a customer’s need for a product is not urgent, what type of demand does the product probably have?
elastic demand
The value of the next best alternative that is given up to obtain the preferred item.
Opportunity Cost
Looks at the BIG picture of economics like communities, nations, and global decision making.
Macroeconomics
Looks at the smaller picture of economics like individuals, small businesses.
Microeconomics
Each unit consumed gives less satisfaction
Law of Diminishing Returns
What are the four factors of production?
Land, Labor, Entrepreneurship, and Capital.
Market structure where a single business dominates a product or service.
Monopoly
A market dominated by a few producers who may work together to influence market prices.
Oligopoly
Institutions that are created in order to regulate the Economy. ie IRS, Federal Reserve, ect.
Economic Institution
Total Amount of Goods and Services that a given economy Demands at a given over all price level in a given time period.
Aggregate Demand
The Total amount of Goods and Services that a given economy Produces at a given overall price level in a given time period.
Aggregate Supply
Nominal is the value in US Dollars. Real is looking at the same “Basket of goods” in two economies and comparing the cost.
Real vs Nominal
Demand Curve is a line representing how much of a good consumers want at a given price. Quantity Demanded is the number of goods.
Demand and Demand Curve
Price restrictions set in place by a 3rd party that either limit how much you can charge for a good or limit how little you can charge for a good.
Price Ceilings and Floors
Barriers to Trade
Tariff, Subsidy, Embargo,
