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42 terms

econ mann

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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