Chapters 1-5 study guide – Flashcards
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A good that consumers demand less when their incomes increase
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What are inferior goods?
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Interaction of supply and demand
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What determines the price and quantity produced of most goods?
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Efficient economy
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How would you describe an economy that uses its resources to make the greatest possible number of goods and services?
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knowledge and skills developed
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Human capital includes
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good/service is unavailable
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What is a shortage?
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$2
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Entrepreneur has sweaters w/fixed costs of $100. Makes 10 a month spends $15 on wool. Makes 11 one month spends $17 on wool what is the marginal cost of the eleventh sweater?
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model shows increase in one, relies on decrease of the other one. national defense vs. domestic needs
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Gun's and butter decision
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less of a demand
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The price of movie tickets in a town has risen from $7 to $9 what is the most likely effect of the change?
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bought 10 at $1 later he will only but 8 at $1.50
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Will a sprinter sees local store raised price of sports drink from $1 to $1.50 what will be his response?
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when a price is lower, people will buy more of it
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Basic principle of the law of demand
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In an LLP all partners are limited from personal liability in certain situations
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Difference between general partnership and limited liability partnership LLP
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Four
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Movie rentals were $2.95 Sara rents ten a month. The price increased by 50 cents and Sara rented two fewer. Price increased by $1 and she cute the number of movies in half. What is her quantity demanded by month at current price?
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Cost of kiwis will decrease while cost of tires will increase
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Community produces large number of tires and small amount of kiwis. Kiwis became popular, and they decided to expand kiwi cultivation and decrease tire manufacturing. According to the law of increasing costs what will happen
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Will decrease
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Alex receives raise and continues to work same number of hours. His demand for $3 shirts which he considers an inferior good will do what?
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Increase number of sandwiches when price increases; tendency of suppliers to offer more of a good at a higher price
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Law of supply
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limited equality of resources to meet unlimited wants
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What is scarcity?
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if price is expected to drop, current demand will fall
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How is the current demand for a good related to its future price?
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Physical capital
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Bens family purchased a dishwasher so that they save time. This kind of production factor is
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Bc owners are free to set own rules and operating standards, but they benefit from national ad. programs
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Why do you think franchising has become popular in recent years?
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Demand
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When a consumer is able and willing to buy a good/service he or she creates what?
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physical capital
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What is a factory building an example of?
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person owns/runs business
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Entrepreneur
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It becomes practical to produce more goods
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When the selling price of a good goes up, what is the relationship to the quantity supplied?
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Uses all resources to make greatest number of goods
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An efficient economy is one that does what?
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Alternative decisions that could have been made
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What is the opportunity cost of a decision?
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If price is expected to rise current demand will rise too
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How is future price related to current demand?
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Capital goods
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Any resources that are made by humans and used to create other goods and services are called
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Scarcity - limited amounts of goods/services available to meet unlimited amounts. Shortage - consumers want more of good, producers willing to make at particular price
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Difference between scarcity and shortage
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The amount a company relieves for selling its goods
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What is a company's total revenue
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The use of email to replace slower surface mail
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Give an example of lower production costs brought about by the use of technology
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Horizontal
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Two giant automakers merged to form a single corporation the type of merger is
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Store the goods until price increases
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What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?
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It buys less
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When prices rise, what happens to income?
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Company is paying workers less than should
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A company that makes baseball caps in underutilizing its resources. What does this mean?
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Limited partnership
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In which kind of business organization should you participate if you can afford to lose only the amount of your initial investment?
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Rent
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What is a fixed cost for a store?
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A rise in demand for shelter
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What kind of changes would be expected in the demand of a country that has a growing population?
