Basic Economic Concepts
Something essential for survival versus something people desire but do not need to survive.
What is Needs versus Wants?
In a circular flow diagram, what do households provide to firms?
What are the four factors of production?
Elastic or inelastic? Gasoline. How do you know?
What is inelastic—people still buy it even when prices go up?
What are the four main types of economic systems?
What is traditional, command, market, and mixed economies?
Legal protection for inventions, to encourage innovation.
What is a patent and why do governments issue them?
Land, Labor, Capital, Entrepreneurship.
What are the four factors of production?
What does it mean when the supply curve shifts to the right on a graph?
What is suppliers are willing and able to SUPPLY more of the good at every price?
What happens to the price when there’s a surplus of goods?
What is prices tend to fall?
What type of economy does the U.S. have?
What is mixed economy?
What makes a product elastic?
What is if a small price change causes a large change in quantity demanded?
Choosing to go to college instead of working full-time. Working full time would be your...
What is opportunity cost?
a) On the curve,
b) Inside the curve, and
c) Outside the curve.
What is
a) efficient
b) inefficient
c) unattainable
The price at which the quantity demanded equals the quantity supplied.
What is equilibrium price?
A market with many buyers and sellers, identical products, and no barriers to entry.
What is perfect competition?
To correct market failures, promote equity, ensure competition, etc.
What is government intervention?
The condition that results from society not having enough resources to produce all the things people would like to have.
What is Scarcity?
What happens to the PPF if there is a new technology that increases productivity?
What is the curve shifts outward?
A sudden increase in consumer income shifts the demand curve for luxury cars. What happens to equilibrium price and quantity?
What is both increase?
Utilities like water or electricity supply.
What is natural monopoly?
It can increase demand by influencing consumer preferences.
What is advertising? Bonus | what curve would it shift?
All the possible combinations of two goods that an economy can produce with available resources and technology.
What does a PPF (Production Possibilities Frontier) graph show?
What causes a shift in the supply curve? Name at least two reasons.
What is change in the cost of inputs, technological advancements, changes in government policy (taxes/subsidies), number of sellers, or producer expectations?
What causes a shift in the demand curve? Name at least two reasons.
What is change in income, tastes, number of buyers, price of related goods, expectations?
What’s the difference between an oligopoly and a monopoly?
Oligopoly has a few firms dominating; monopoly has only one seller.
How would a tax on producers affects the supply curve?
What is it shifts the supply curve to the left, increasing prices and lowering quantity?