Test 1 Supply & Demand
Quiz yourself by thinking what should be in
each of the black spaces below before clicking
on it to display the answer.
Help!
|
|
||||
|---|---|---|---|---|---|
| division of labor | the way in which the work required to produce a good or service is divided into tasks performed by different workers
🗑
|
||||
| economics | the study of how humans make choices under conditions of scarcity
🗑
|
||||
| scarcity | when human wants for goods and services exceed the available supply
🗑
|
||||
| specialization | when workers or firms focus on particular tasks for which they are well-suited within the overall production process
🗑
|
||||
| fiscal policy | economic policies that involve government spending and taxes
🗑
|
||||
| macroeconomics | the branch of economics that focuses on broad issues such as growth, unemployment, inflation, and trade balance.
🗑
|
||||
| Microeconomics | the branch of economics that focuses on actions of particular agents within the economy, like households, workers, and business firms
🗑
|
||||
| monetary policy | policy that involves altering the level of interest rates, the availability of credit in the economy, and the extent of borrowing
🗑
|
||||
| circular flow diagram | a diagram that views the economy as consisting of households and firms interacting in a goods and services market and a labor market
🗑
|
||||
| goods and services market | a market in which firms are sellers of what they produce and households are buyers
🗑
|
||||
| labor market | the market in which households sell their labor as workers to business firms or other employers
🗑
|
||||
| model | see theory
🗑
|
||||
| theory | a representation of an object or situation that is simplified while including enough of the key features to help us understand the object or situation
🗑
|
||||
| command economy | an economy where economic decisions are passed down from government authority and where resources are owned by the government
🗑
|
||||
| exports | products (goods and services) made domestically and sold abroad
🗑
|
||||
| globalization | the trend in which buying and selling in markets have increasingly crossed national borders
🗑
|
||||
| gross domestic product (GDP) | measure of the size of total production in an economy
🗑
|
||||
| imports | products (goods and services) made abroad and then sold domestically
🗑
|
||||
| market | interaction between potential buyers and sellers; a combination of demand and supply
🗑
|
||||
| market economy | an economy where economic decisions are decentralized, resources are owned by private individuals, and businesses supply goods and services based on demand
🗑
|
||||
| private enterprise | system where the means of production (resources and businesses) are owned and operated by private individuals or groups of private individuals
🗑
|
||||
| traditional economy | typically an agricultural economy where things are done the same as they have always been done
🗑
|
||||
| underground economy | a market where the buyers and sellers make transactions in violation of one or more government regulations
🗑
|
||||
| budget constraint | all possible consumption combinations of goods that someone can afford, given the prices of goods, when all income is spent; the boundary of the opportunity set
🗑
|
||||
| law of diminishing marginal utility | as we consume more of a good or service, the utility we get from additional units of the good or service tend to become smaller than what we received from earlier units
🗑
|
||||
| marginal analysis | examination of decisions on the margin, meaning a little more or a little less from the status quo
🗑
|
||||
| opportunity cost | measures cost by what is given up in exchange; opportunity cost measures the value of the forgone alternative
🗑
|
||||
| opportunity set | all possible combinations of consumption that someone can afford given the prices of goods and the individual’s income
🗑
|
||||
| sunk costs - | costs that are made in the past and cannot be recovered
🗑
|
||||
| utility | satisfaction, usefulness, or value one obtains from consuming goods and services
🗑
|
||||
| allocative efficiency | when the mix of goods being produced represents the mix that society most desires
🗑
|
||||
| comparative advantage | when a country can produce a good at a lower cost in terms of other goods; or, when a country has a lower opportunity cost of production
🗑
|
||||
| law of diminishing returns | as additional increments of resources are added to producing a good or service, the marginal benefit from those additional increments will decline
🗑
|
||||
| production possibilities frontier (PPF) | a diagram that shows the productively efficient combinations of two products that an economy can produce given the resources it has available.
🗑
|
||||
| productive efficiency | when it is impossible to produce more of one good (or service) without decreasing the quantity produced of another good (or service)
🗑
|
||||
| invisible hand | idea that self-interested behavior by individuals can lead to positive social outcomes
🗑
|
||||
| normative statement | statement which describes how the world should be
🗑
|
||||
| positive statement | statement which describes the world as it is
🗑
|
||||
| demand curve | a graphic representation of the relationship between price and quantity demanded of a certain good or service, with quantity on the horizontal axis and the price on the vertical axis
🗑
|
||||
| demand schedule | a table that shows a range of prices for a certain good or service and the quantity demanded at each price
🗑
|
||||
| demand | the relationship between price and the quantity demanded of a certain good or service
🗑
|
||||
| equilibrium price | the price where quantity demanded is equal to quantity supplied
🗑
|
||||
| equilibrium quantity | the quantity at which quantity demanded and quantity supplied are equal for a certain price level
🗑
|
||||
| equilibrium | the situation where quantity demanded is equal to the quantity supplied; the combination of price and quantity where there is no economic pressure from surpluses or shortages that would cause price or quantity to change
🗑
|
||||
| excess demand | at the existing price, the quantity demanded exceeds the quantity supplied; also called a shortage
🗑
|
||||
| excess supply | at the existing price, quantity supplied exceeds the quantity demanded; also called a surplus
🗑
|
||||
| law of demand | the common relationship that a higher price leads to a lower quantity demanded of a certain good or service and a lower price leads to a higher quantity demanded, while all other variables are held constant
🗑
|
||||
| law of supply | the common relationship that a higher price leads to a greater quantity supplied and a lower price leads to a lower quantity supplied, while all other variables are held constant
🗑
|
||||
| price | what a buyer pays for a unit of the specific good or service
🗑
|
||||
| quantity demanded | the total number of units of a good or service consumers are willing to purchase at a given price
🗑
|
||||
| quantity supplied | the total number of units of a good or service producers are willing to sell at a given price
🗑
|
||||
| shortage | at the existing price, the quantity demanded exceeds the quantity supplied; also called excess demand
🗑
|
||||
| supply curve | a line that shows the relationship between price and quantity supplied on a graph, with quantity supplied on the horizontal axis and price on the vertical axis
🗑
|
||||
| supply schedule | a table that shows a range of prices for a good or service and the quantity supplied at each price
🗑
|
||||
| supply | the relationship between price and the quantity supplied of a certain good or service
🗑
|
||||
| surplus | at the existing price, quantity supplied exceeds the quantity demanded; also called excess supply
🗑
|
||||
| ceteris paribus | other things being equal
🗑
|
||||
| complements | goods that are often used together so that consumption of one good tends to enhance consumption of the other
🗑
|
||||
| factors of production | the combination of labor, materials, and machinery that is used to produce goods and services; also called inputs
🗑
|
||||
| inferior good | a good in which the quantity demanded falls as income rises, and in which quantity demanded rises and income falls
🗑
|
||||
| inputs | the combination of labor, materials, and machinery that is used to produce goods and services; also called factors of production
🗑
|
||||
| normal good | a good in which the quantity demanded rises as income rises, and in which quantity demanded falls as income falls
🗑
|
||||
| shift in demand | when a change in some economic factor (other than price) causes a different quantity to be demanded at every price
🗑
|
||||
| shift in supply | when a change in some economic factor (other than price) causes a different quantity to be supplied at every price
🗑
|
||||
| substitute | a good that can replace another to some extent, so that greater consumption of one good can mean less of the other
🗑
|
||||
| price ceiling | a legal maximum price
🗑
|
||||
| price control | government laws to regulate prices instead of letting market forces determine prices
🗑
|
||||
| price floor | a legal minimum price
🗑
|
||||
| total surplus | see social surplus
🗑
|
||||
| consumer surplus | the extra benefit consumers receive from buying a good or service, measured by what the individuals would have been willing to pay minus the amount that they actually paid
🗑
|
||||
| deadweight loss | the loss in social surplus that occurs when a market produces an inefficient quantity
🗑
|
||||
| economic surplus | see social surplus
🗑
|
||||
| producer surplus | the extra benefit producers receive from selling a good or service, measured by the price the producer actually received minus the price the producer would have been willing to accept
🗑
|
||||
| social surplus | the sum of consumer surplus and producer surplus
🗑
|
Review the information in the table. When you are ready to quiz yourself you can hide individual columns or the entire table. Then you can click on the empty cells to reveal the answer. Try to recall what will be displayed before clicking the empty cell.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
To hide a column, click on the column name.
To hide the entire table, click on the "Hide All" button.
You may also shuffle the rows of the table by clicking on the "Shuffle" button.
Or sort by any of the columns using the down arrow next to any column heading.
If you know all the data on any row, you can temporarily remove it by tapping the trash can to the right of the row.
Embed Code - If you would like this activity on your web page, copy the script below and paste it into your web page.
Normal Size Small Size show me how
Normal Size Small Size show me how
Created by:
EdL
Popular Economics sets