This is the unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically.
What is Adam Smith's "invisible hand" theory?
100
__________ economics is objective and fact based, while __________ economics is subjective and value based.
What is positive & normative economics?
100
True or false: price (alone) can shift our supply/demand curve to the right or to the left?
FALSE!
100
Venezuela is experiencing extreme ___________, as a result of its government implementing price controls within the economy.
What is price ceilings?
100
____________ is a situation in which a country does not trade with other countries.
What is autarky?
200
______________ is the study of economics at an individual, group or company level. _____________, on the other hand, is the study of a national economy as a whole
What is microeconomics and macroeconomics?
200
Over time as a society gains more resources, from one (or more) of the factors of production (land, labor, & capital), the production possibility frontier shifts outward (to the right).
What is economic growth?
200
1. The country is experiencing a recession and you lose your job. The affect on ramen noodles would be __________?
2. What do we call ramen noodles in this case?
1. demand increases (shift right)
2. inferior good
200
What happens when a price ceiling is set above equilibrium?
What about when a price floor is set below equilibrium?
What is NOTHING!
200
Trade is based on __________ __________ and not ____________ ____________.
1. comparative advantage
2. absolute advantage
300
What you must give up in order to get an item you want is called _____________?
What is opportunity cost?
300
If the curve is bowed out, the opportunity costs increase as more of one good is produced because resources are not easily transferable from the production of one good to another.
What is the law of increasing costs?
300
Technology improvements lower the cost of producing smart-phones, while new mobile applications also make more consumers want to have smartphones.
What are the effects on the market for smart-phones?
Government meddling (price controls) often lead to what within an economy?
What is black market activity?
300
______________ is considered to be a source of comparative advantage.
Climate, factor endowments, or technology
400
Deciding whether to do a bit more or a bit less of an activity, like what to do with your next hour, your next dollar, and so on—are __________ decisions.
What is marginal?
400
John Maynard Keynes argued that the number one driver of the economy is _________ and not __________, unlike many economists before him had believed.
What is demand & supply?
400
The price of printers has dropped significantly. What is the effect on the market of ink cartridges? What do we call ink cartridges in this case?
1. demand increases (shift right)
2. complement
400
Price ceilings lead to _____________?
Price floors lead to _____________?
1. shortages
2. surpluses
400
When the world price is lower than the autarky price, local consumers will _________, creating a _________ surplus.
What is import & consumer?
500
An economy is ___________ if it takes all opportunities to make some people better off without making other people worse off.
What is efficient?
Remember: economics is the study of how to effectively and efficiently allocate scarce resources!
500
The _________ market is where factors of production are put to work, while the _________ market is where final goods/services are ready to be bought/sold.
What is factor & product market?
500
There is an increase in the wages of apple pickers and an increase in the price of oranges (a substitute for apples). How does this affect the market for apples?