Introduction to Economics
The origin of the term "economics" comes from two Greek roots, oikos meaning household and nomus, meaning system or management. The origin of the word economics can be translated to "management of household"
Oikonomia or oikonomus
If the demand curve for a good shifts leftward, quantity demanded is ____ at each price
less
This pertains to the general agreement of the buyer and the seller at a particular price and at a particular quantity.
Equilibrium
In the theory of perfect competition, buyers and sellers of the product have _____________.
Complete Information
If the interest rate ____________, then households will consume less and save more.
increases
This is a mechanism of distribution to address the needs and wants of citizens in an environment with scarce resources.
Allocation
Resource X is necessary to the production of good Y. If the price of resource X rises, the supply curve of Y shifts _________
leftward
This condition shows the tendency of sellers to lower market prices in order for the goods and services to be easily disposed from the market.
Surplus
There are a few sellers and many buyers in this market structure.
Oligopoly
The ability to pay principle is used as a basis for this form of taxation. A good example of this is income tax.
Progressive tax
This assumption is used as a device to analyze the relationship between two variables while the other factors are held unchanged.
Ceteris Paribus
Suppose the government decides that every family should own its own home. To bring this about, the government decides to subsidize the home-construction industry by giving the home-construction companies P500,000 for every house that they build. As a result of this, the ________ curve of new houses would shift rightward.
supply
This form of price control is placed when there is persistent shortage of goods.
Price ceiling
In what market structure is the interdependence of firms a key characteristic?
Oligopoly
This is the basis of the minimum wage rates prescribed by law wherein the normal working hours are _______.
eight hours a day
This principle talks about the ability of the government to alter market outcomes to promote equity and efficiency.
Principle 7 or Governments can Sometimes Improve Market Outcomes
At situation A, the price of good X is 20 and the quantity is 400; at situation B, the price of good X is 19 and the quantity is 360; at situation C, the price of good X is 17 and the quantity is 230. Solve for the corresponding function.
Qs = - 450 +40P
If Qd= 30-11P and Qs=-13+9P, what is the equilibrium price and quantity?
In a monopolistic competitive industry, each firm in the industry produces a slightly differentiated product and this is done through convincing people that one firm's good is different from the goods of competitors. What method is this?
Advertising
Talking about interest rates; during this time, businesses are more likely to use their cash for new equipment and plant improvements
Interest rates are low
Opportunity Cost
An increase in the expected price of corn would likely do the following to the current supply and demand for corn: increase the ________, but decrease the ___________
On a supply-and-demand diagram, consider a price for which the horizontal distance to the supply curve exceeds the horizontal distance to the demand curve. There is a __________ at that price and the current price must be __________ the equilibrium price.
surplus; above
A monopolist can sell 7,000 units at a price of P5 per unit. Lowering price to all buyers by P1 raises the quantity demanded by 500 units. What is the change in total revenue resulting from this price change?
-P5,000
A firm is considering the purchase of a capital good that will generate an additional P250,000 income each year for 4 years (after which time the capital good is useless and has no scrap value). The capital good will cost P80,000. If the interest rate is 3 percent, it follows that the firm ________ (should/should not) purchase the capital good
should not