1
2
3
4
5
100
The condition of having unlimited wants/desires and limited resources.
Scarcity
100
A place where buyers and sellers meet and agree on a price of goods or services.
Market
100
Where the quantity supplied equals the quantity demanded.
Market equilibrium
100
The extra satisfaction a consumer gains from paying a price less than they were prepared to pay.
Consumer surplus
100
If the price of a substitute rises, demand for the good will ______.
increase
100
Identify the type of elasticity.
Elastic demand
100
Identify the type of elasticity.
Perfectly inelastic demand
100
(Δ% Qd of A) / (Δ%P of B)
What is this formula used for?
Cross price elasticity of demand (XED)
100
IF XED is ______ , then the two goods are complements of each other.
negative
100
A fixed amount of tax that is imposed on a product, which shifts the supply curve vertically upwards by the amount of tax.
Indirect tax/Specific tax
300
Which government intervention may have caused this?
Subsidy
300
The total spending by consumers on domestic goods and services.
Consumption
300
Use of government spending and taxation to increase the level of aggregate demand (economic activity).
Expansionary fiscal policy
No marks for only fiscal policy
300
Number of unemployed/Labour force x 100
Unemployment rate
300
This type of unemployment occurs when people move between jobs and are in a transitory state on unemployment as they seek a new job.
Frictional unemployment
400
This measures inflation and deflation by calculating the change in the price of a basket of goods and services consumed by the average household.
Consumer price index (CPI)
400
Identify the curve.
Lorenz curve
400
Movement from A to B implies potential economic growth. True or False?
False. It implies actual economic growth.
400
Identify the type of inflation.
Demand-pull inflation
400
The term for government policies that may have moved LRAS to LRAS1.
Supply-side policies
500
When a country can produce a given amount of output at a lower opportunity cost than another country.
Comparative advantage
500
Policies aimed at restricting the flow of imports into a country and creating an advantage to exporting firms.
Protectionism
500
The value of the exchange rate that is determined by the supply and demand of the currency on the foreign exchange market.
Floating exchange rate
500
This condition states that currency devaluation will only lead to an improvement in the balance of payments if the sum of demand elasticity for imports and exports is greater than one.
Marshall Lerner Condition
500
Index of exports prices / Index of import prices x 100
Terms of Trade