Demand & Supply
Under normal circumstances, when the price of a commodity falls, the quantity demanded will
Increase
The Law of Diminishing Marginal Utility tells us that if you eat an entire chocolate cake, the amount of satisfaction you get from the tenth piece compared to the amount of satisfaction from the first piece will be
Less
The study of decisions made by business, individuals, and families is called
microeconomics
An increase from 5% to 8% banks' interest rates would most likely encourage people to:
Either save their money or stop getting loans.
In the United States, who determines what goods and services are produced?
producers, consumers, and the government
If there is a large increase in the number of fast food restaurants in a community what will happen to the prices of fast food there?
Lower Prices
The study of the behavior of the whole economy is called
Macroeconomics
Goods that perform the same function that can be used in place of other goods (e.g., sandals and flip flops) are called
substitute goods.
What organization regulates the nation's banks and money supply?
Federal Reserve System
A person who starts a business to produce a new product in a marketplace is called what?
Entrepreneur
If the United States stopped importing cars and trucks from South Korea, who would be most likely to benefit?
American automobile manufacturers.
The resources that producers use to produce goods and services are called
factors of production.
What is the desire to own something and the ability to pay for it called?
demand
If the supply of money increases what will happen to prices?
Prices for goods and services will increase.
_______________ is when people trade one good for another good without using money.
Barter
North Face sportswear manufacturers have their manufacturing plants running night and day, but they are can't produce enough sportswear to satisfy demand. If North Face manufacturers can't increase production and demand continues to increase, the price of North Face winter sportswear will:
increase.
Who was the father of economics?
Adam Smith
What are two goods that are bought and used together?
complementary goods
If inflation is higher than normal for six months or more, what is the Federal Reserve likely to do to interest rates?
Raise them.
What is a social and political philosophy based on the belief that wealth should be evenly distributed throughout a society?
communism or command economy
What is the economic term that describes how we measure how consumers react to a change in price?
demand elasticity
Name one type of capital resource.
Answers vary, depending on the type of job one does. But doctors might use a stethoscope. For teachers- SmartBoards, etc.
What are the three factors of production?
labor, capital, land
Fiat Money
What economic system relies on habit, custom, or ritual to answer the three economic questions?
Traditional Economy