Unit 1: Thinking Like an Economist
scarcity
When the government places a limit on how much businesses can charge for a product, this is a _______
price ceiling
a market structure where a single firm is the sole seller of a product with no close substitutes
monopoly
Great Recession
opportunity cost
If demand changes significantly in response to a price change, demand is considered to be __________.
elastic
Explain, in 1 clear and specific sentence, why prices go up when a company has a monopoly
Possible answer - because there is no competition so the firm with a monopoly can get away with it and consumers have no other choice
Measure of all goods and services produced in a country's economy, divided by the nation's population size
GDP per capita
A restaurant owner buys three ovens for his restaurant. He is deciding whether to buy a fourth oven and decides that a fourth oven would not provide enough additional benefit. This is because of the economic concept of ____________________.
diminishing marginal utility
Economists would argue that price ceilings on bread would lead to a ___________ of bread
shortage
Name one thing that Amazon does that has led to them being accused of being a monopoly
Possible answers:
-If a vendor tries to sell their item for less on another site, Amazon’s system buries that merchant’s products in search results
-Amazon requires sellers to use its own shipping service in order to get the "Prime" badge on their products
-Amazon search results favor Amazon's own products over other vendors'
Quantitative measure of inequality in a given country
GINI coefficient
Answers must describe a strategy that persuade people using ideas about right and wrong or that create a sense of guilt about smoking - e.g. second hand smoke makes children sick
Give an example of a proportional tax
Ex: an income tax where everyone pays the same percentage of their income
The term used to describe the fact that expanding production volume lowers the average cost per unit
economies of scale
Explain in a clear and specific sentence why unemployment rates in the US are an imperfect measure of how the labor market and economy are doing
Possible answers:
-They do not count "discouraged workers" i.e. workers who have given up on looking for a job
-They do not include underemployed workers e.g. workers who only have part-time jobs but who need/want full-time work
The ________________ is an economic concept used to argue that the economy works best with minimal interference, when it is allowed to operate naturally based purely on the forces of supply and demand.
invisible hand
Would also accept "free market"
https://docs.google.com/document/d/1PgRWC-68_NCDgbmWIGmCOP3j3XRzV4XbLF5jlX4mg4Y/edit?usp=sharing
This is a supply and demand graph for sneakers. Come up with a scenario that would lead to the shift depicted in the graph.
Possible answers:
-a social media campaign or successful PR campaign
-increase in price of substitutes such as other types of shoes
-increase in consumers' income, as a result of a strengthening economy
Explain why Tesla was accused of having a monopoly
Tesla forced Tesla car owners to use only Tesla-owned service centers, forcing them into paying exorbitant prices and enduring lengthy wait times
Prices of all goods increased between 3.1% between January 2023 and 2024