Q1: basics of graphs and economics

Question 1

Japanese Currency

Answer 1

Yen

Question 2

Korean Currency

Answer 2

Won

Question 3

Chinese Currency

Answer 3

Yuan

Question 4

Describe a Product Graph

Answer 4

P/Q, S/D (P=price, Q=quantity) (S=supply of product, Quantity of product sold)

Question 5

Describe a Labor Graph

Answer 5

W/Q, S/D (W=wage rate, Q=quantity) (S=supply of workers, D=demand for workers from company)

Question 6

Describe a Foreign Exchange Graph

Answer 6

V/Q, S/D (V=value of currency, Q=quantity of currency) (S=domestic supply of money/citizens leaving, D=foreign demand for the money/foreigners visiting)

Question 7

What are Goods

Answer 7

physical objects someone purchases (ex: food, clothes, or video games)

Question 8

What are Services

Answer 8

actions or activities that one person performs for another (Ex: medical care or haircuts)

Question 9

What is scarcity

Answer 9

limited amounts of goods and services are available to meet unlimited wants and needs

Question 10

What is Economics

Answer 10

the study of how people seek to satisfy their needs and wants by making choices on different levels (individual, groups, governments)

Question 11

What are Entrepreneurs

Answer 11

people who decide how to combine resources to create new goods and services

Question 12

What is Land in economics

Answer 12

all natural resources used to produce goods and services

Question 13

What is Labor in economics

Answer 13

the effort people devote to tasks for which they are paid

Question 14

What is capital (physical and human)

Answer 14

any human-made resource that is used to produce other goods/services.

• physical capital is human made objects used to create other goods and services (ex: a building housing a company that makes other products)
• human capital is the knowledge and skills a worker gains through education and experience (ex: increase your human capital to advance physical capital)

Question 15

Three basic economic questions

Answer 15

• What goods and services should be produced?
• How should these goods and services be produced?
• Who consumes these goods and services?

The answers define a country’s economic system.

Question 16

Ceteris Paribus

Answer 16

assuming that only one factor would change rather than many

Question 17

What are non-price determinants

Answer 17

factors that can cause demand/supply to shift, including income, population, advertising, and more

Question 18

What are normal goods

Answer 18

goods that consumers demand more of when their incomes increase

Question 19

What are inferior goods

Answer 19

goods that you would buy in smaller amounts or not at all if your income were to rise and you could afford alternatives

Question 20

Impact of future expectations

Answer 20

If you know a product will be cheaper tomorrow, you wont buy it today. Or, if you know that a product is cheaper today you might buy a lot of it in advance.

Question 21

Impact of demographics

Answer 21

different demographics (age, race, gender, occupation, income level) will want different goods. The baby boom for example, causes a rise in baby products and now that those babies are grown up there is more demand for senior-care products.

Question 22

Impact of advertising

Answer 22

Advertising shifts demand curve because it leads to trends and interest in products (technology has changed advertising to digital and consumer based)

Question 23

Related goods: Complements

Answer 23

goods that are bought and used together (ex: erasers and pencils)

Question 24

Related goods: Substitutes

Answer 24

goods that are used in place of one another (ex: pencils and pens)

Question 25

Inelastic demand

Answer 25

the amount of a good you buy doesn’t change, or changes very little, after a large price increase. (ex: medicine or someone who really loves doritos more than fritos)

Question 26

Elastic demand

Answer 26

when the amount of a good you buy is greatly impacted by price changes. (ex: someone who would rather spend less money on a different product than more on a usual one)

Question 27

What is a subsidy

Answer 27

a government payment that supports a business or market

Question 28

What is an excise tax

Answer 28

a tax on the production or sale of a good used to discourage use (ex: cigarettes, alcohol)

Question 29

What is market regulation

Answer 29

government intervention in a market that affects the price, quantity, or quality of a good (ex: food safety inspection)

Question 30

Non-price determinants that change supply

Answer 30

changes in global economy (ex: oil and russia), inflation, changes in competition of production/sale of the product, location

Question 31

What is Equilibrium

Answer 31

the point of balance where demand and supply are equal

Question 32

What is disequilibrium

Answer 32

occurs when supply and demand are not equal in a market

Question 33

What is a shortage

Answer 33

A shortage occurs when demand is higher than supply.

Question 34

What is a surplus

Answer 34

A surplus exists when supply exceeds demand

Question 35

What is a price ceiling

Answer 35

A maximum price for a good or service set by the government. For example, rent control in NYC which led to less housing available and thus more without homes or good homes, but ending rent control would make homes too expensive for many people.

Question 36

What is a price floor

Answer 36

A minimum price set by the government. For example, minimum wage which is set by the federal gov and can be set higher, but not lower, by state govs.

Question 37

Tending to Equilibrium

Answer 37

Markets for products will tend toward equilibrium naturally, because factors affected by a change will also change in reaction.

Question 38

Changing equilibrium

Answer 38

New technology (ex: development of cameras) and time can change what equilibrium is from the supply side. New trends (ex: toys or clothing type) and time can change equilibrium from the demand side.