Market Structures
Many Buyers and Sellers, identical products, Price Takers
Perfect Competition
Price and quantity demanded vary inversely. As price increases, consumers buy less
What is the law of demand?
If the price of a product changes and quantity demanded changes less (people buy about the same amount of the product), what is the elasticity of the product?
What is Inelastic?
a decline in real GDP for 6 months or 2 quarters in a row
What is a recession?
What is a tax on foreign goods, and what does it do to the price of foreign goods?
What is a Tariff and increases the price of foreign goods?
Few Large sellers and Collusion exists (price fixing)
What is Oligopoly?
As price increases, quantity supplied
what increases?
A price ceiling occurs _________ and results in ___________
what is below equilibrium and a shortage
the phase of the business cycle that unemployment is increasing, Real GDP (output is decreasing), downward sloping portion
What is a Contraction?
If a country imports 500 million dollars worth of goods in a year and exports 300 million dollars worth of goods a year, then the country has a __________ ______________
What is a Trade deficit?
Has many buyers and sellers, has product differentiation
What is monopolistic Competition?
If the price of a product increases, what happens to its complement?
what is demand decreases?
Minimum wage is an example of a _______________. It occurs _____________
What is a Price floor and above equilibrium price?
Name the four phases of the business cycle
What are Expansion, Peak, Contraction, Trough
If two countries agree to trade they are ____________, If one countries currency appreciates the other countries currency will _____________
What is Trading partners and depreciates?
It is easy for new firms to enter (little or no barriers to entry) (there are two)
what are perfect competition and monopolistic Competition?
If the price of a resource decreases, what happens to the products that use that resource in production?
what is supply decreases?
What is a shortage and what happens to price as a result?
what is quantity demanded is greater than quantity supplied and price increases?
The market where the factors of production (resources) are bought and sold (exchanged for income)
What is the Factor market
Name the three trade restictions
Tariffs, quotas and Trade licenses
What type of laws made most monopolies illegal?
What are anti trust laws? (clayton anti trust law and sherman anti trust law)
what is EP decreases and EQ increases
If there is an unintended cost to an unintended third party, this is a __________________. How does the government remedy it?
What is a negative externality and the government adds an excise tax?
In the circular flow model, resources flow from ____________ to _____________ and Products (goods and services) flow from _____________ to _______________
what are Households to Firms and
Firms to households?
What is the difference between absolute advantage and comparative advantage
What is ...absolute advantage is what a country can produce the most of, but comparative advantage is what they can produce the most of at the lowest opportunity cost?