Microeconomics :( - Assignment Essays %

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Economics

answer

the study of how society manages its scarce resources, the study of choice

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Scarcity

answer

Demand is greater than supply

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Productive Efficiency

answer

Products are being produced in the least costly way

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Allocative Efficiency

answer

The products being produced are the ones most desired by society

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Command Economy

answer

An economic system in which the government controls a country's economy.

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Free Market Economy

answer

a system in which prices are not controlled by the government

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Mixed Economy

answer

Economy partially controlled by the government

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Import Quotas

answer

the government sets the maximum amount of a product that can come into the country

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Quota

answer

a limit on a number of exports

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Subsidies

answer

government gives producers money

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Excise Taxes

answer

a per unit tax on producers

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Demand

answer

the different quantities of goods that consumers are willing and able to buy at different prices

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Law of Demand

answer

there is an inverse relationship between price and quantity demanded

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The Substitution Effect

answer

if the price goes up for a product, consumers will buy less of that product and more of another substitute product

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The Income Effect

answer

if the price goes down for a product, the purchasing power increases for consumers, allowing them to purchase more

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Law of Diminishing Marginal Utility

answer

The more you buy of ANY GOOD the less satisfaction you get from each new unit consumed.

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Ceterus Paribus

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all other things held constant

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Shifters of Demand

answer

1. Tastes and Preferences
2. Number of Consumers
3. Price of Related Goods
4. Income
5. Future Expectations

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Shifters of Supply

answer

1. Prices/Availability of Resources
2. Number of Sellers
3. Technology
4. Government Action
5. Expectations of Future Profit

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Substitutes

answer

goods used in place of one another

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Complements

answer

two goods that are bought and used together

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Normal Goods

answer

Goods for which demand goes up when income is higher and for which demand goes down when income is lower.

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Inferior Goods

answer

Goods for which demand tends to fall when income rises.

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Supply

answer

The amount of goods available

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Law of Supply

answer

there is a direct relationship between price and quantity supplied

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Price Ceiling

answer

A legal maximum on the price at which a good can be sold

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Price Floor

answer

A legal minimum on the price at which a good can be sold

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Elasticity

answer

shows how sensitive quantity is to a change in price

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Price Elasticity of Demand

answer

measurement of consumers responsiveness to a change in price

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Inelastic Demand

answer

quantity is insensitive to a change in price

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Elastic Demand

answer

quantity is sensitive to a change in price

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Characteristics of Inelastic Demand

answer

Few substitutes, necessities, small portion of income, required now, elasticity coefficient is less than 1

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Characteristics of Elastic Demand

answer

Not a necessity, many substitutes, large portion of income, plenty of time to decide, elasticity coefficient is more than 1

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Perfectly Elastic

answer

horizontal line

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Perfectly Inelastic

answer

vertical line

question

Unit Elastic

answer

when the percentage change in price and quantity demanded are the same

question

Total Revenue

answer

Price x Quantity

question

Cross-Price Elasticity of Demand

answer

how sensitive a product is to a change in the price of another good

question

Income Elasticity of Demand

answer

shows how sensitive a product is to a change in income

question

Price Elasticity of Supply

answer

shows how sensitive producers are to a change in price

question

World Price

answer

the price of a good that prevails in the world market for that good

question

Tariff

answer

A tax on imported goods

question

Tax Incidence

answer

who actually pays for an excise tax

question

Utility Maximizing Rule

answer

the consumer's money should be spent so that the marginal utility per dollar of each goods equal each other

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Dead Weight Loss

answer

The lost net benefit to society caused by a movement away from the competitive market equilibrium, such as a tax

question

Milk

answer

milk

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Surplus

answer

supply is greater than demand

1 of 47

question

Economics

answer

the study of how society manages its scarce resources, the study of choice

question

Scarcity

answer

Demand is greater than supply

question

Productive Efficiency

answer

Products are being produced in the least costly way

question

Allocative Efficiency

answer

The products being produced are the ones most desired by society

question

Command Economy

answer

An economic system in which the government controls a country's economy.

question

Free Market Economy

answer

a system in which prices are not controlled by the government

question

Mixed Economy

answer

Economy partially controlled by the government

question

Import Quotas

answer

the government sets the maximum amount of a product that can come into the country

question

Quota

answer

a limit on a number of exports

question

Subsidies

answer

government gives producers money

question

Excise Taxes

answer

a per unit tax on producers

question

Demand

answer

the different quantities of goods that consumers are willing and able to buy at different prices

question

Law of Demand

answer

there is an inverse relationship between price and quantity demanded

question

The Substitution Effect

answer

if the price goes up for a product, consumers will buy less of that product and more of another substitute product

question

The Income Effect

answer

if the price goes down for a product, the purchasing power increases for consumers, allowing them to purchase more

question

Law of Diminishing Marginal Utility

answer

The more you buy of ANY GOOD the less satisfaction you get from each new unit consumed.

question

Ceterus Paribus

answer

all other things held constant

question

Shifters of Demand

answer

1. Tastes and Preferences
2. Number of Consumers
3. Price of Related Goods
4. Income
5. Future Expectations

question

Shifters of Supply

answer

1. Prices/Availability of Resources
2. Number of Sellers
3. Technology
4. Government Action
5. Expectations of Future Profit

question

Substitutes

answer

goods used in place of one another

question

Complements

answer

two goods that are bought and used together

question

Normal Goods

answer

Goods for which demand goes up when income is higher and for which demand goes down when income is lower.

question

Inferior Goods

answer

Goods for which demand tends to fall when income rises.

question

Supply

answer

The amount of goods available

question

Law of Supply

answer

there is a direct relationship between price and quantity supplied

question

Price Ceiling

answer

A legal maximum on the price at which a good can be sold

question

Price Floor

answer

A legal minimum on the price at which a good can be sold

question

Elasticity

answer

shows how sensitive quantity is to a change in price

question

Price Elasticity of Demand

answer

measurement of consumers responsiveness to a change in price

question

Inelastic Demand

answer

quantity is insensitive to a change in price

question

Elastic Demand

answer

quantity is sensitive to a change in price

question

Characteristics of Inelastic Demand

answer

Few substitutes, necessities, small portion of income, required now, elasticity coefficient is less than 1

question

Characteristics of Elastic Demand

answer

Not a necessity, many substitutes, large portion of income, plenty of time to decide, elasticity coefficient is more than 1

question

Perfectly Elastic

answer

horizontal line

question

Perfectly Inelastic

answer

vertical line

question

Unit Elastic

answer

when the percentage change in price and quantity demanded are the same

question

Total Revenue

answer

Price x Quantity

question

Cross-Price Elasticity of Demand

answer

how sensitive a product is to a change in the price of another good

question

Income Elasticity of Demand

answer

shows how sensitive a product is to a change in income

question

Price Elasticity of Supply

answer

shows how sensitive producers are to a change in price

question

World Price

answer

the price of a good that prevails in the world market for that good

question

Tariff

answer

A tax on imported goods

question

Tax Incidence

answer

who actually pays for an excise tax

question

Utility Maximizing Rule

answer

the consumer's money should be spent so that the marginal utility per dollar of each goods equal each other

question

Dead Weight Loss

answer

The lost net benefit to society caused by a movement away from the competitive market equilibrium, such as a tax

question

Milk

answer

milk

question

Surplus

answer

supply is greater than demand

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