Supply & Demand
What is the point called where supply and demand meet?
Equilibrium Point or Market Equilibrium
What are the four main types of market structures in economics?
Perfect competition, monopolistic competition, oligopoly, and monopoly.
What is the business cycle?
The pattern of expansion and contraction in a nation’s economic activity over time.
What is an economic system?
The way a society organizes the production, distribution, and consumption of goods and services.
During which phase do stock prices usually hit their lowest point?
Trough
Define Supply AND Demand
Supply: The quantity of a good or service that producers are willing and able to sell at various prices. "Available"
Demand: The quantity of a good or service that consumers are willing and able to buy at various prices. "Desired"
In perfect competition, what determines the price of a product?
Market supply and demand.
Name the four main phases of the business cycle.
Expansion, peak, contraction (recession), trough
Name the three main economic questions every society must answer.
1. What to produce?
2. How to produce it?
3. Who to produce it for?
Which phase of the business cycle would best describe the U.S. economy if unemployment is low and wages are rising?
Expansion
If the government sets a price floor on milk above the equilibrium, what happens?
A surplus of milk.
Name one example of an oligopoly.
Airline industry, car manufacturers, or cell phone service providers.
If the economy has six months of declining GDP, what is it officially called?
A Recession
Give two examples of a country with a mixed economy.
The United States, Singapore, or the United Kingdom.
Name one modern-day example of a country with a communist economic system.
China, North Korea, Cuba
If a drought destroys half the corn crop, what happens to the supply of corn? How does a graph reflect this?
Supply decreases. The graph shows a shift left.
Which market type best describes your local farmer’s market?
Perfect Competition
Which phase of the business cycle would best describe the U.S. economy if unemployment is low and wages are rising?
Expansion
In a traditional economy, what often determines a person’s job or role?
Family, customs, or inherited traditions.
Who is known as the “father of modern economics”?
Adam Smith
What happens if both supply and demand increase at the same time?
Quantity increases, but price could rise, fall, or stay the same depending on which change is larger.
Can new firms easily enter a monopolistically competitive market?
AND
Do firms in monopolistic competition have some control over price?
Yes, barriers to entry are low.
Yes, because their products are slightly different.
What year did the U.S. experience the Great Recession?
2008
Which type of economy does the United States have?
AND
Who makes all the major economic decisions in a command economy?
Mixed economy (Capitolism w/ governement regulations)
The government
Why do firms in monopolistic competition use advertising?
To differentiate their products from competitors.