Fill in the blank
Economics is the study of _________.
Human Behavior
or how society manages its scarce resources.
When the government redistributes income with taxes, the economy becomes more efficient. True or false
False- people has less of an incentive to work hard
Note the difference between equity and efficiency
what would happen to the market for bacon if the price of pork increased?
The supply would decrease
input prices
What is it called when quantity demanded exceeds quantity supplied in a market?
A shortage
A decision maker takes an action if _________.
The marginal benefit is greater than the marginal cost.
The U.S Economy would be better off if we stopped trading with Asian countries because we would produce more things here. True or False
False, all countries benefit from voluntary trade
What would happen to demand for Ford trucks if their prices were expected to rise in the future?
it would increase, people would want to buy them now
What are the 3 types of intensives?
Economics, moral, social
If creamer and coffee are compliments, and the price of creamer increases, then demand for coffee will _______.
Decrease
If cereal is an inferior good and your income increases you will buy less of it. True or false
True
What would happen to the market for gasoline if a new gas station was built in Warrensburg?
Supply would increase
Number of sellers in the market
What are some characteristics of perfectly competitive markets?
- lots of buyers and sellers
-good are identical
- no control over price
A shortage causes an incentive for sellers to ______ the price.
Increase
-Note- the price of gas during a natural disaster
A high minimum wage will cause unemployment. true or false
True
If pizza is a normal good, what happens to the quantity demanded of pizza if the price of pizza increases?
it decreases
Who has control of price in a perfectly competitive market?
No one
Points located on the edge of the production possibilities frontier are ___________.
Efficient
Markets are the best way to organize economic activity. True or false
True
If apple and android are substitutes, what happens in the market for apple if the price of androids increases?
Demand for apples would increase
Why are most production functions not linear?
Inputs are specialized