Group 1
A bakery in a small town decides to offer discounts on its most popular item, fresh sourdough bread. Customers quickly line up, and sales surge. However, while revenue increases initially, the bakery struggles to keep up with demand, and by midday, it runs out of stock. This results in customers leaving disappointed, while some even consider switching to competitors for similar products.
Question: What term describes a situation where demand exceeds the available supply?
Sho____
Shortage
An automaker is considering entering the Chinese market, a region with rapidly increasing demand for electric vehicles. The company carefully evaluates the potential profits from this venture against the costs of establishing factories, navigating regulatory challenges, and hiring a local workforce. After conducting this detailed analysis, the company determines that the benefits outweigh the costs and decides to proceed.
Question: What term describes the process of comparing the costs and benefits of a decision?
Cos_ - Ben____ Ana____
Cost-Benefit Analysis
A premium electronics retailer begins offering a free protective case with every smartphone purchase. This strategy drives higher sales, as customers perceive the added value of receiving an additional product. Over time, the store notices that customers often buy other accessories, like chargers and screen protectors, along with the smartphones, further increasing revenue.
Question: What term refers to the difference between the actual price paid and the value customers were willing to pay?
Con___ Sur___
Consumer Surplus
What is the term for the money people earn from working, which they use to buy goods and services?
Income
When there is more demand for a product than there is supply, what is this situation called?
Shortage
A government, aiming to ensure national food security, sets a policy that guarantees a fixed minimum price for wheat. Farmers benefit from financial stability, but over time, the policy leads to excess production. Warehouses become overfilled, and the government struggles to manage and store the surplus grain.
Question: What term refers to a government-imposed minimum price to support producers?
Pr___ Fl___
Price Floor
A tech giant launches a revolutionary wearable device. At first, the innovation excites customers, and they line up to buy it. The company continues adding new features with each model, such as more sensors and advanced fitness tracking. However, market research shows that customers’ excitement about additional features declines over time, especially as these features become redundant or unnecessary.
Question: What term describes the decreasing additional satisfaction customers derive from consuming more of a good?
Di____ Ma______ Ut_____
Diminishing Marginal Utility
Two competing airlines dominate a region's travel market. When one airline introduces a fare reduction, the other quickly follows suit. Similarly, when one airline adds new destinations, the other responds by expanding its routes. Smaller airlines struggle to compete due to the large market influence of these two dominant players.
Question: What term describes a market structure dominated by a small number of powerful firms?
Ol_____
Oligopoly
What is the name of the large ships used to transport goods like cars, food, and electronics across oceans
Cargo ships
What is the term for a business’s earnings after all expenses are paid?
Profit
An economist is researching consumer behavior in urban households. By studying their spending habits, the economist discovers that families allocate their income across various goods in a way that maximizes their overall satisfaction. The study reveals that these choices are influenced by income levels and the prices of available goods.
Question: What term describes the limitation imposed on consumption choices by income and prices?
B_____ C_____
Budget Constraint
A car company develops a new manufacturing process that significantly reduces production costs. By scaling up production in its newly built facility, the company achieves higher efficiency. The reduced cost per vehicle allows the company to lower prices and attract more buyers, leading to increased market share and profitability.
Question: What term describes the reduction in average costs as production levels increase?
E_____ of S______
Economies of Scale
A local coffee shop sells premium coffee blends at prices higher than the market average. Despite this, it enjoys a steady flow of customers who value its cozy ambiance, high-quality products, and excellent service. The shop’s unique offering enables it to charge more while maintaining customer loyalty.
Question: What term refers to the ability of a firm to influence prices due to its position in the market?
M_____ P_____
Market Power
This company is famous for revolutionizing the car industry by focusing on electric vehicles and self-driving technology. What is it?
P.S. Matteo hates it
Tesla
What is the currency used in the majority of countries in the European Union?
Euro
A smartphone manufacturer realizes that its pricing strategy for mid-range devices is attracting budget-conscious consumers. These customers, who might have opted for cheaper alternatives, find the features of the mid-range devices to be worth the slightly higher price. The company positions itself as offering the optimal combination of affordability and quality.
Question: What term describes the combination of goods that maximizes satisfaction within a given budget?
O______ C______ B_______
Optimal Consumption Bundle.
A multinational food company sells beverages and snacks. It notices that when certain beverages are promoted, sales of snacks also increase. Similarly, when new snack flavors are introduced, they often boost beverage sales. The company leverages this relationship in its marketing campaigns to maximize revenue.
Question: What term refers to goods that are often consumed together?
C_______ G______
Complementary Goods
A city imposes strict regulations on real estate developers, limiting the number of high-rise buildings that can be constructed. While the policy aims to preserve the city’s historical aesthetic, it creates a scarcity of new apartments. As demand for housing grows, prices rise sharply, making it difficult for many residents to afford housing.
Question: What term describes the distribution of a limited resource among competing uses?
R______ A_____
Resource Allocation
What is the term for a limit set by the government on how low a product’s price can go, often used to support industries like agriculture?
Price floor
This economist is known for the idea of the "invisible hand," which describes how free markets regulate themselves. Who is he?
Adam Smith
A retailer introduces a "buy one, get one free" offer for its popular clothing line. Customers flock to the store, resulting in a sharp increase in sales. However, the promotion also encourages over-purchasing, leaving some customers dissatisfied when they realize they don’t need the extra items.
Question: What term describes the concept of giving up one benefit to gain another?
Trade-Off
A startup offering solar panels notices that as the price of electricity increases, more customers inquire about its products. The company highlights the long-term savings customers can achieve by switching to solar energy, positioning itself as a practical alternative to traditional energy sources.
Question: What term describes goods that can replace one another in consumption?
Substitute Goods
A logistics company considers expanding its fleet of trucks. Before making a decision, the company calculates the additional revenue it would generate from each truck versus the cost of purchasing and maintaining it. The analysis helps determine whether the expansion will be profitable.
Question: What term refers to the revenue generated by selling one additional unit of a product?
Marginal Revenue
What is the term for a sudden and unexpected increase in demand for a product, often caused by external factors like trends or natural disasters?
Demand shock
When one country can produce a good more efficiently than another, it is said to have what kind of advantage?
Comparative advantage