Basic Economic Concepts
In a command economy, this group decides what goods and services will be produced.
The government
When the price of a good increases, the quantity demand usually does what?
Decreases
If demand changes a lot when price changes, then the demand is _______________
elastic
Oligopoly
What do we call a legal maximum price that can be charged for a good
Price ceiling
This type of economy combines free markets with some government involvement
Mixed economy
This described which economic law: when a good's price is lower, consumers buy more of it
Law of Demand
If demand changes little when price changes, demand is said to be __________________
inelastic
A market with a single seller and no competition
Monopoly
The legal minimum price that can be charged for a good
What is a price floor
Prices in a market economy act as _______________ to buyers and sellers
Signals
This describes which economic law: As price increases, a producer offers more
A small increase in price would cause a large decrease in the quantity demanded when demand is ______________
elastic
Charging different prices to different groups of people for the same product is called..
Price discrimination
What is a common goal of government intervention in markets?
To correct market failures
What are the three basic economic questions?
What to produce, how to produce, and for whom to produce
What does a demand curve shift to the right and left signify?
To the right: increase in demand
To the left: decrease in demand
Answers will vary
The smartphone industry dominated by Apple, Samsung, and Google is an example of this market type
The point at which quantity demanded and quantity supplied come together or meet is called what?
Equillibrium price
Compare how command and market economies answer the three basic economic questions
In a command economy, the government decides all three. In a market economy, producers and consumers are in charge and base their decisions off of supply and demand.
Besides price, name the 5 determinants of demand (CTIPS)
C: Complimentary goods
T: Taste
I: Income
P: Population
S: Substitute goods
When would a good be considered "inelastic" in terms of supply?
When the supply is unable to change even though there is a significant change in price or quantity demanded
One major issue with monopolies (and sometimes oligopolies) is that they can do THIS to prices and output
Provide and example of a price ceiling and price floor
Answers will vary