question
What is the most basic law of economics?
answer
supply and demand
question
What law states that producers will be willing to supply more of a good or service the higher the price?
answer
law of supply
question
What way do supply curves slope?
answer
up
question
What measures how the quantity supplied responds to a change in price?
answer
elasticity of supply
question
What determines elastic versus inelastic supply?
answer
production time
question
What kind of supply can be quickly increased?
answer
elastic
question
What kind of supply can NOT be quickly increased?
answer
inelastic
question
Supply can become more elastic over time as suppliers shift what?
answer
factors of production
question
What is the term used to describe the amount of goods and services available at a given price point?
answer
supply
question
What term is used to describe the actual amount supplied at a given price
answer
quantity supplied
question
What three things can you have with supply (but not all three at once!)?
answer
speed, quality, price
question
What is the trade off between supply and demand?
answer
equilibrium point
question
When all goods and services are demanded, the market is efficient, and there is no shortage or surplus
answer
equilibrium point
question
When prices are not at equilibrium point
answer
market distortion
question
When the price is ABOVE equilibrium
answer
surplus
question
When price is BELOW equilibrium
answer
shortage
question
What happens when the government intervenes in the market?
answer
disequilibrium
question
Term to describe when there is an excess of money and it loses its value
answer
inflation
question
When prices can't go over a certain point and causes shortages (suppliers opt out)
answer
price ceiling
question
When prices can't go below a certain point and causes surplus (lowers demand)
answer
price floor
question
When the government makes a payment to support the market
answer
subsidy
question
When the government gives money to farmers to not grow food
answer
farm subsidies
question
When the government gives money to people for food purchases
answer
food stamps
question
When the government gives money to people in exchange for using more expensive wind and/or solar
answer
energy subsidies
question
This creates winners and losers, and inflates prices
answer
subsidies
question
This is created by the executive branch, the cost is passed to consumers, and it distorts the market
answer
government regulations
question
When the government divides up goods and services equally without regard to supply and demand
answer
rationing
question
Done during wartime to fight inflation when shortages are present
answer
rationing
question
An illegal market
answer
black market
question
Caused by laws or price floors/ceilings when demand is still present
answer
black market
question
Who's going to ace this test?
answer
ME!!!!
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