Supply & Demand
This states that price and quantity demanded are inversely related.
What is law of Demand?
Cross elasticity of demand is used to determine if goods are this
What are substitutes and complements?
Allowing trade typically has this impact on prices
What is lower prices?
Governments can interfere with the rationing function of prices in these ways
What are price floors and price ceilings
This situation signals market prices down due to disequilibrium.
What is a surplus?
An improvement in production technology would cause this type result on a supply & demand diagram
What is a rightward shift of the supply curve?
Greater availability of substitutes would result in what kind of change to elasticity?
What is more elastic?
Mr. Knecht exchanged U.S. dollars for Euro before his trip to Italy last Summer. This has this impact on the supply curve for U.S. dollars
What is a decrease or leftward shift?
The government can impose a tax to discourage the use of this type of good
What is a demerit good?
An increase in quantity supplied might be caused by............
What is increase in price?
In the market for basketballs and Hey Dude shoes, new technology has come out to make Hey Dudes twice as fast. This would happen to the PPF
What is bowed out on the Hey Dude side of the diagram?
According to the total revenue test, this type of good has revenue increase when price increases
What is inelastic?
A tariff has this intended impact on the international trade market
What is answers will vary
Government is imposing a minimum legal price that is typically above the equilibrium price
What is Price Floors?
An increase in demand accompanied by an increase in supply will have this effect on the equilibrium quantity
What is Increase?
When Mr. Knecht gets a raise, his demand for most products will increase. This is known as this phenomenon.
What is the income effect?
A product has an income elasticity of demand of -.60 making this product this
What is an inferior good?
An increase in the demand for exports from Djibouti would result in this effect on the Djiboutian franc.
What is appreciation?
Government sets a legal price that results in a shortage of wheat.
What is a price ceiling?
Comparative advantage is determined by whoever has this...
What is the lowest opportunity cost?
When the price of Nike soccer balls fell, Ronaldo purchased more Nike soccer balls and fewer Adidas soccer balls.
What is the substitution effect?
A product has a price elasticity of demand of 0.48....making the product this.
What is inelastic?
Inflation is running rampant in Papua New Guinea. This would happen to the value of the Papua New Guinean Kina against the U.S. Dollar.
What is depreciate?
Governments can use tariffs or quotas to help domestic producers. This idea is known as...
What is Protectionism?
The idea of the "Invisible Hand" which states in a free market economy, self-interested individuals operate through a system of mutual interdependence, is credited to this man
Who is Adam Smith?