Basic Econ I
The fundamental problem that arises because resources are limited but wants are unlimited.
What is Scarcity?
Demand that changes very little with price changes.
What is inelastic demand?
A firm’s ability to influence price.
What is market power?
A work stoppage by employees.
What is a strike?
The index used to measure changes in prices over time.
What is the Consumer Price Index (CPI)?
This concept explains why people and countries focus on producing what they do best.
What is specialization?
The point where quantity supplied equals quantity demanded.
What is equilibrium?
Airlines as an example of this structure.
What is oligopoly?
The market in which workers sell their time and skills in exchange for wages.
What is the labor market?
Policy involving interest rates and money supply.
What is monetary policy?
An economy where prices guide production decisions.
What is a market economy?
The result of a binding price ceiling.
What is a shortage?
Firms in perfect competition produce where these are equal.
What are marginal revenue and marginal cost?
Laws that limit mandatory union membership.
What are right-to-work laws?
Defense spending as an example of this spending.
What is discretionary spending?
A centrally planned economic and political system with little private ownership.
What is communism?
The effect of consumer tastes changing.
What is a demand shift?
A market with one seller and no close substitutes.
What is a monopoly?
A group organized to protect workers’ interests.
What is a labor union?
The government’s main source of revenue.
What are taxes?
A graph showing the maximum combinations of goods that can be produced.
What is a production possibilities frontier (PPF)?
A price elasticity of demand less than 1.
What is inelastic demand?
A monopoly that occurs due to high fixed costs.
What is a natural monopoly?
Negotiations between workers and employers over pay and conditions.
What is collective bargaining?
A decrease in the value of money.
What is inflation?