Random
The hope of reward or fear of penalty that encourages a person to behave a certain way.
What is incentive?
a person who decides how to combine resources to create goods and services
what is an entrepreneur?
What law states that as price decreases, quantity demanded increases?
What is the law of demand?
____cost does not change regardless of how much a company produces
What is fixed cost?
What do we call a good that people will buy more of when their income increases, such as steak or designer clothing?
What is a normal good?
a Scottish social philosopher who, in 1776, published a book titled The Wealth of Nations, in which he described how markets function.
Who is Adam Smith?
Sets and provides standards for food, drugs, and cosmetic products
What is the Food and Drug Administration (FDA)?
What happens to the equilibrium price when demand increases and supply stays the same?
What is the price goes up?
What happens to supply when production costs decrease?
What is supply increases (shifts right)?
What type of good experiences increased demand when income decreases, like generic-brand groceries or used cars?
What is an inferior good?
market-based economic system in which the government is involved to some extent.
What is a mixed economy?
Scenario: a collapse of construction cranes that results in serious injury or death would trigger investigations from this federal agency
What is Occupational Safety and Health Administration (OSHA)?
What happens to the demand for an inferior good when consumer income rises?
What is demand decreases?
a measure of how consumers respond to price changes
What is elasticity of demand?
What do we call goods that are often consumed together, like peanut butter and jelly, where an increase in the price of one decreases the demand for the other?
What are complementary goods?
system characterized by private or corporate ownership of capital goods
What is a free enterprise system?
Because the market is vulnerable to business cycles, the government tries to create public policies that promote economic strength. Policymakers do so by pursuing three main goals:
What are high employment, growth, and stability?
If the price of Coca-Cola rises, and people buy more Pepsi instead, what factor is causing this shift in demand?
What is the price of a substitute good?
You notice that the price of gasoline has increased by twenty cents a gallon. Your car runs on gasoline and there are no substitutes. Despite the increase, your demand for gasoline is_____
What is inelastic?
What type of good is both non-excludable and non-rivalrous, meaning one person’s use does not reduce availability for others?
What is a public good?
______ amendments protect private property, or property owned by individuals or companies and not by the government or the people as a whole.
What are the Fifth and Fourteenth?
Bonus: and patent laws
In a period of macroeconomic expansion, or growth, a country produces more than it did before and ___ goes up.
What is gross domestic product (GDP)?
A new trend makes a product highly desirable, causing demand to increase. What happens to the demand curve, and in which direction does it shift?
What is the demand curve shifts to the right?
(A change in the quantity demanded is a response to a price change only. A change in demand shifts the demand curve left or right, in response to changes that affect the product at every price)
Remember that elastic demand comes from one or more of these factors: 1. the availability of substitute goods. 2. a limited budget that does not allow for price changes 3. ______
What is the perception of the good as a luxury item?
it encourages businesses to innovate, reduce costs, and improve products to maximize profits?
What is profit motive?