Show:
Ch. 1 & 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
100
The adage, "There is no such thing as a free lunch," means __________.
What is people face trade offs.
100
_________ is the ability to produce a good using fewer inputs than another producer.
what is absolute advantage.
100
A __________ is a market in which there are many buyers and many sellers so that each has a negligible impact on the market price.
What is competitive market.
100
It is important to know when calculating elasticity that elastic demand is ______.
What is greater than 1.
100
A _____ is a legal maximum on the price at which a good can be sold.
What is price ceiling.
200
When the government attempts to improve equality in an economy, the result is often ________.
What is a reduction in efficiency.
200
Robinson Crusoe can gather 10 coconuts or catch 1 fish per hour. His friend Friday can gather 30 coconuts or catch 2 fish per hour. Who has an absolute advantage in catching fish? Who has a comparative advantage is catching fish?
Who is Friday (absolute advantage) Who is Robinson Crusoe (comparative advantage)
200
A(n) __________ is a good for which, other things equal, an increase in income leads to a decrease in demand.
What is inferior good.
200
Price elasticity of demand = ___________
What is % change in quantity demanded/% change in price.
200
The minimum wage is an example of a ________.
What is price floor.
300
___________ refers to the ability of an individual to own and excercise control over scarce resources.
What is property rights.
300
Who developed the theory of comparative advantage?
Who is David Ricardo.
300
A(n) _______ is a good for which, other things equal, an increase in income leads to an increase in demand.
What is normal good.
300
The midpoint formula is ______________.
What is (Q2-Q1)/[(Q2+Q1)/2]/(P2-P1)/[(P2+P1)/2]
300
Describe the tax incidence.
What is the manner in which the burden of a tax is shared among participants in a market.
400
This diagram is a schematic representation of the organization of the economy.
What is the circular flow diagram.
400
Tom Brady can mow his lawn in 2 hours. In the same 2 hours, he could film a television commercial and earn $20 000. By contrast, Forrest Gump can mow Brady's lawn in 4 hours, In that same time Gump could work at McDonald's and earn $40. What would Tom Brady have to pay Gump to mow his long so that they are both better off?
What is more than $40 and less than $20 000.
400
What is the law of supply and demand?
What is the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
400
The __________ measures how the quantity demanded of one good responds to a change in the price of another good.
What is cross price elasticity of demand.
400
How is the burden of a tax divided?
A tax burden falls more heavily on the side of the market that is less elastic.
500
A relatively flat demand curve indicates that ___________.
What is quantity demanded will adjust significantly to a price change.
500
Certain talented people have a comparative advantage in everything they do. (T or F)
What is False. It is not true that some people have a comparative advantage in everything they do. In fact, no one can have a comparative advantage in everything. If you have a comparative advantage in one thing, you must have a comparative disadvantage in the other thing.
500
A movement upward and to the left along a demand curve is called ________.
What is a decrease in quantity demanded.
500
Cross-price elasticity of demand is calculated by _______.
What is % change in quantity demanded of good 1/% change in the price of good 2.
500
Which principle of economics explain why economists usually oppose price controls.
What is markets are usually a good way to organize economic activity.