Supply & Demand
The higher the price, the lower the demand and the lower the price, the higher the demand describes this.
law of demand
This is a tax on imported goods and services
tariff
in which markets do households give money payments to businesses in exchange for goods and services?
product markets
This type of structure has low barriers to entry with identical or perfect substitutes.
ex. farmers market where vendors sell different types of jams
perfect competition
This measures production inside of a country, no matter who makes it.
GDP - gross domestic product
This is the place where what sellers are willing to sell for and buyers are willing to buy for meet.
equilibrium (price)
A tariff will impact trade by ___________ the number of trades.
reducing/decreasing
this is when there is an economic downturn for at least 6 months, consumers hold off on spending and employees are laid off
recession (contraction)
This type of economic system relies on the government to make all economic decisions including allocating and distributing resources as well as regulating prices.
Command
This type of GDP (gross domestic product) takes into account inflation to give a more accurate picture of GDP over time.
Real GDP
College graduation is in a few weeks and lots of friends and family will be coming to town for the big day. What will happen to the demand for hotels?
demand increases
more consumers in the market
This is the gap between limited resources (time, attention, $$, etc...) and unlimited wants and needs for those resources. This is a reason why someone may choose to trade.
scarcity
In which market do businesses give money-income payments to household i exchange for their productive resources?
resource markets
This type of market structure has low barriers to entry and hundreds of firms, such as hair salons, clothing stores, and restaurants.
monopolistic competition
If a producer is producing at a point that is below the PPC (production possibilities curve) the producer is __________.
inefficient
A baker sells cinnamon rolls. A fungus has destroyed the bark of cinnamon trees causing a shortage of cinnamon. What happens to the supply of cinnamon rolls?
supply decreases
increase cost (or shortage) of an input will cause a decrease in supply
(hint: not selfish)
police cars, fire engines, etc.... are examples of a good or service that businesses sell to who?
the government
This type of economic system is driven by consumers, whose decisions determine how the industries and financial markets will operate. Individuals choose jobs, what goods to buy, and what to make.
market
If the US can produce 50 cars and 150 beef &
Canada can produce 25 cars and 50 beef
Which country has the absolute advantage in beef?
Which country has the absolute advantage in cars?
beef: US (150>50)
cars: US (50>25)
The local coffee shop decides to increase its prices. What will happen to supply and demand?
a change in price without a change in the price of input does not change supply or demand.
_______ ________ is when trading is motivated when participants see greater value in what they gain vs. what they lose.
voluntary exchange
this is when the economy is in a recovery phase and consumers spend and employees are hired
expansion
This type of market structure has high barriers to entry with just a few firms that sell either identical or different goods, such as airlines, pharmaceutical companies, and OPEC.
oligopoly
If the US can produce 50 cars and 150 beef &
Canada can produce 25 cars and 50 beef
Which country has the comparative advantage in beef?
Which country has the comparative advantage in cars?
beef:US (1/3 <1/2)
cars: Canada (2<3)