Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
74 Cards in this Set
- Front
- Back
The summation of a person's assets:
|
Wealth
|
|
The study of how a society uses its scarce resources to supply the insatiable wants and needs of the society both now and in the future:
|
Economics
|
|
Any tangible item that meets the criteria of a want or need:
|
Good
|
|
Scarcity leads to ____.
|
costs
|
|
The items that go into producing the items that we want:
|
Resources (i.e. factors of production)
|
|
Any intangible but useful activity which meets the criteria of a want or need:
|
Service
|
|
What are scarce goods known as?
|
Economic goods
|
|
When the individual is making a decision:
|
Private choice
|
|
That which can be measured:
|
Positive analysis (GOOD)
|
|
The next best alternative foregone when making any decision:
|
Opportunity cost
=explicit costs + implicit costs |
|
The coming together of buyers and sellers whose joint decisions determine the price:
|
Market
|
|
What are known as economic goods?
|
Scarce goods
|
|
The amount that will be purchased at a particular/specific price:
|
Quantity demanded
|
|
A good such that when incomes rise, demand for the good falls:
|
Inferior good
|
|
What are the 3 ways a society can make itself better off?
|
1) saving
2) specialization of labor 3) trade |
|
When quantity demanded equals quantity supplied and there are no unintended shortages or surpluses:
|
Equilibrium
|
|
Cannot be measured; an opinion:
|
Normative analysis (BAD)
|
|
When the government is making a decision:
|
Public choice
|
|
States that as prices rise, quantity demanded falls, and as prices fall, quantity demanded rises:
|
Law of Demand
|
|
Goods you buy together:
|
Complements (ex: peanut butter/jelly)
|
|
A legal maximum which can be charged for a good or service:
|
Price ceiling
|
|
When quantity demanded is greater than quantity supplied at a specific price:
|
Shortage
|
|
What 5 things might change demand?
|
Changes in:
1) tastes and preferences 2) expectations 3) laws 4) prices of other goods 5) income |
|
A good such that when incomes rise, demand for that good will also rise:
|
Normal good
|
|
The amount of a good or service that will be purchased at any given price:
|
Demand
|
|
A measure of consumer responsiveness:
|
Elasticity
|
|
All non-pecuniary costs (all costs not have to do w/$$):
|
Implicit costs
|
|
What is the ONLY thing that will change quantity demanded?
|
A change in price
|
|
When quantity supplied is greater than quantity demanded at a particular price:
|
Surplus
|
|
What age group is relatively responsive to a change in price?
|
Senior citizens
|
|
A similar good that you would buy instead of another good:
|
Substitute (ex: buying Panasonic instead of Sony)
|
|
States that as price rises, quantity supplied rises:
|
Law of Supply
|
|
The amount that people were willing to pay for a good or service, but did not have to:
|
Consumer surplus
|
|
List 2 facts about an effective price ceiling.
|
An effective price ceiling will always:
1) Lie below equilibrium 2) Cause a shortage |
|
Accounting costs:
|
Explicit costs
|
|
What age group is relatively unresponsive to a change in price?
|
Middle age
|
|
Economic profit:
|
Producer's surplus
|
|
A legal minimum which can be charged for a good or service:
|
Price floor
|
|
If the price of one complement goes up, what will happen to the other complement?
|
Demand for the other will fall.
|
|
What is the price elasticity of demand equal to?
|
= (% change in quantity demanded)/(% change in price)
= Q2-Q1/Q1 |
|
What type of laws ALWAYS HURT the community?
|
Anti-price governing laws
|
|
If the price of one substitute goes up, what will happen to the other substitute?
|
Demand for the other substitute will also rise.
|
|
If a good is a necessity, demand for the good is:
|
Inelastic
|
|
If an increase in consumer incomes leads to a decrease in the demand for camping equipment, then camping equipment is:
|
An inferior good
|
|
The ability to produce a good at a lower opportunity cost than another producer:
|
Comparative advantage
|
|
A flatter demand curve is more likely to be:
|
Price elastic
|
|
For ____ goods, income elasticity is positive.
|
Normal goods
|
|
If price elasticity of demand is less than 1, demand is ____.
|
Inelastic
|
|
If price elasticity of demand is equal to 1, demand is ____.
|
Unitary (has unit elasticity)
|
|
If an increase in the price of blue jeans leads to an increase in the demand for tennis shoes, then blue jeans and tennis shoes are:
|
Substitutes
|
|
If price elasticity of demand is greater than 1, demand is ____.
|
Elastic
|
|
The flatter the demand curve, the more ____.
|
Elastic
|
|
A measure of how much the quantity demanded of a good responds to a change in consumers’ income:
|
Income elasticity of demand
|
|
For ____ goods, income elasticity is negative.
|
Inferior goods
|
|
The steeper the demand curve, the more ____.
|
Inelastic
|
|
A measure of how much the quantity demanded of a good responds to a change in the price of that good:
|
Price elasticity of demand
|
|
The price elasticity of demand is positive for ____.
|
Substitutes
|
|
A measure of the relative happiness or gratification gained by consuming different bundles of goods and services:
|
Utility
|
|
A good characterized by a positive income elasticity:
|
Normal good
|
|
The ____ the demand curve, the more elastic.
|
Flatter
|
|
The price elasticity of demand is negative for ____.
|
Complements
|
|
An effective price floor always creates...
|
A surplus
|
|
Why do senior citizens receive discounts?
|
They have different time costs
|
|
The measure of responsiveness of an economic agent to a change in variable:
|
Elasticity
|
|
You work an Income Elasticity of Demand problem and you answer is (-1.39). Therefore you know that the product is:
|
Elastic and inferior
|
|
The law of demand states that price and quantity demanded are:
|
Inversely related
|
|
An effective price floor always lies:
|
Above the equilibrium
|
|
You work a Cross-Price Elasticity of Demand problem and your answer is (-0.57). Therefore you know that the product is:
|
Inelastic and a complement
|
|
Rent controls are also known as:
|
Price ceilings
|
|
An effective price ceiling always lies...
|
Below the equilibrium
|
|
In a competitive market for DVD players, an increase in income will cause:
|
DVD players = normal good
An increase in price |
|
An effective price celing always creates...
|
A shortage
|
|
In a competitive marks for chips, a decrease in the price of Lays Potato Chips will cause what w/ Golden Flake Potato Chips?
|
Lays Chips/Golden Flake Chips = substitutes
A decrease in price |
|
In a competitive market for tennis rackets, a fall in the price of tennis balls will cause:
|
Tennis racket/tennis balls = complements
An increase in price An increase in demand An increase in qty. supplied |