Supply and Demand
This is the point at which quantity supplied equals quantity demanded.
What is Equilibrium/the Equilibrium Point?
This is the type of good that has a large change in Quantity Demanded when price changes.
What is an elastic good?
This is what a country does when it focuses on producing one item that it is best at.
What is specialization?
These are things the government does to prevent negative externalities.
What are regulations?
This is what it is called when the government sets a highest price for a good.
What is a price ceiling?
This is the amount of something that sellers are willing and able to sell at a bunch of different prices.
This is the term for the price that employers pay for labor.
What is a wage?
A country that is able to produce more of everything than another country is said to have this.
What is absolute advantage?
The failing grade when private business provides too much or too little of a good or service.
What is market failure?
Price floors tend to lead to these.
What are surpluses?
This is what happens when the quantity demanded is lower than quantity supplied.
What is a Surplus?
This is one of the pieces of information that a price reflects.
Possible answers:
-Supply and Demand (market equilibrium)
-Scarcity of the product
-How difficult it is to provide the product/good
-Cost of factors of production
This is the dollar amount of exports minus the dollar amount of imports?
What is Net Exports/Trade Balance?
These are 2 common types of regulation the government can implement to protect citizens.
Possible answers:
Zoning Laws, Environmental Protections, Building Codes (from our book)
Labor laws, quality control laws, transparency laws may be examples of other types of regulations.
These interest rates are for loans less than one year.
What are short-term interest rates?
This is a good whose demand curve shifts left when consumer income increases.
What is an inferior good?
This is one of the reasons why a good may be inelastic.
Possible answers:
-No available substitutes
-Price is low compared to income
-It is a necessary purchase you can't delay
This is how countries decide which good to specialize in.
This problem is the reason why the government has to provide some goods and services.
What is the free rider problem?
This is the way that the real interest rate is calculated.
What is: By adding the nominal interest rate to the inflation rate?
These are 3 reasons that might cause a shift in the demand curve.
Possible answers:
-Change in consumer income
-Change in consumer preferences
-Increase/Decrease of number of consumers
-Increases/Decreases of price of related goods
-Consumer Expectations
This is the reason why some jobs have a higher wage than others.
This is the Trade Balance of a country that exports $451 billion of goods and imports $581 billion of goods.
What is -$130 billion? (trade deficit)
These are the 2 factors that make up a public good.
What are nonexcludable and nonrival?
This is the result of free markets not producing enough of a good or service because it would not be profitable to businesses.
What is underproduction?