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when a consumer is able and willing to buy a good or service, he creatses...

demand

what determines the price and the quantity produced of most goods?

the interaction of supply and demand

what are inferior goods

goods for which demand rises when income falls

which of the following is a situation that makes the market behave inefficiently?

when consumers don't have enough information to make good choices

what happens to a market in equilibrium when there is an increase in supply?

quantity supplied will exceed quantity demanded so price will drop

what is it called when the government uses some tool other then money to allocate goods?

rationing

what is the name of the smallest amount that can legally be paid to most workers for an hour of work?

minimum wage

the equilibrium wage for doctors is high because..

the supply of doctors is relatively low and demand is high

You live in a community with many teenagers, and you work during the summer bagging groceries for a low hourly wage. How might living in a community with fewer teenagers looking for grocery bagging jobs affect your hourly wage?

your wages would probably be higher because demand for baggers is higher

The label in your jeans say they were made in a latin american country. This is probably because the jeans manufacturing company wanted to locate its plant?

labor is plentiful and therefore cheaper wages paid

How oes a company arrange to sell its products to people who are unwilling to pay the top price for them?

by charging different prices according to the group to which the buyer belongs (price discrimination)

What is monopolistic competition?

many companies selling similar but not identical products

What is a form of non-price competition?

style, service, quality of product, location

how is future price related to current demand?

if the price is expected to rise, current demand will rise

what determines how a change in prices will affect total revenue for a company?

elasticity of demand

what kind of system is the United States economy based on?

mixed market

when the selling price of a good goes up, what is the relationship to the quantity supplied?

becomes practical to produce more goods

what factor has the greatest influence on elasticity and inelasticity of supply?

time

which of the following is a fixed cost for a store?

rent

if the supply of a good is inelastic

producers will not change their quantity supplied by much if market price doubles

what does it mean when the demand for a product is inelastic?

price increase doesnt have a significant impact on buying habits

what is a basic principle of the law of demand?

when good's price is lower, people buy more of it

when prices rise, which of the following happens to income

it buys less

what is the effect of import restrictions on prices?

they cause price to rise

in a free market, prices lead to an efficient allocation of resources in other words..

resources are used in most vauable and productive way according to the needs of consumers and producers

why do fads often lead to shortages, at least in the short term?

demand increases so quickly and unexpectedly that time is needed for quantity supplied and price to increase to meet new equilibrium

what happens to a monopolistically competitive firm that begins to charge an excessive price for its product?

consumers will substitute a rival's product

when the government deregulates a product or service, what happens to it?

some government regulations over industry are eliminated

cartels are difficult to operate for which of the following reasons?

they work only if members keep their agreement output

why does the government sometimes give monopoly power to a company by issuing a patent?

company can then profit form their research without competition

according to economic theory, what happens to job opportunities in low-paying jobs when the minimum wage goes up?

quality of labor demanded goes down

what are conditions for perfect competition?

sellers offer a wide variety of products

what is collective bargaining?

union and company representatives meeting to negotiate new labor contract

how are wages for a particulor job determined?

by the equilibrium between supply and demand for workers for that job

what is an example of a variable cost in a major league baseball franchise?

ticket-taker's saleries

at the most profitable level of production, a firm's marginal cost will be __ the market place

equal to

what happens when wages are set above the equilrium level by law?

firms employ fewer workers then they would at equilibrium wage

on which kinds of goods do governments generally place price ceilings?

those that are essential but too expensive for some consumers

when buyers will purchase exactly as much as sellers are willing to sell, what is the condition that has been reached?

equilibrium

the price ceiling that was used to control the price of housing in NYC and other cities was called which of the following?

rent control

in response to rising car traffic, demand for bicycles has increased. the new equilibrium point will show

more bikes sold but at a higher price

a shortage will develop when

the market price is below the equilibrium

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