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Economics questions
asd
| Question | Answer |
|---|---|
| What are the four factors of production? | Natural resources labor capital entrepreneurs |
| difference between consumer goods and capital goods | consumer goods satisfy wants directly and capital goods satisfy wants indirectly by aiding in the production of consumer goods |
| how entrepreneurs contribute to economy | by starting new businesses, introducing new products, and improving management |
| explain info a demand schedule shows | the various quantities of a product or service that someone is willing to buy over a range of possible prices |
| state law of demand | quantity demanded and price move in opposite directions |
| define market demand | total demand of consumers for a product or service |
| List the three methods someone could use to measure demand for his or her goods or services. | a. visit other shops to gauge consumer reaction to different prices b. poll consumers c. study data about consumer reaction to higher and lower prices |
| Describe how does diminishing marginal utility explain a downward-sloping demand curve. | Marginal Utility tends to diminish for each additional product purchased, which lowers demand. |
| six factors that affect demand | a. Number of consumers b. Complements c. Income d. Consumers’ tastes e. Expectations f. Substitutes |
| explain how consumer's tastes affect demand | If something suddenly becomes popular through advertising, then demand will increase; if popularity fades over time, then demand will decrease. |
| how may the expectation of a product shortage increase demand. | If people are worried that a product will run out, they may want to stock up, thereby increasing demand. |
| List two product-related changes that affect demand. | Changes in substitutes (substitutes rise with it competing products) and changes in complements (Complement prices of products go in opposite directions) |
| define substitutes | Competing products that consumers can use |
| law of supply | As the price for a good rises, the quantity supplied rises, and as the price falls, the quantity supplied falls. |
| the primary motive in business | To earn a profit |
| market supply in a nutshell | The supply schedule of all businesses that supply the same good or service |
| eight factors that affect supply | a. Cost of resource b. Productivity c. Technology d. Government policies e. Taxes f. Subsidies g. Expectations h. Numbers of suppliers |
| Explain why do costs go up when subsidies are repealed. | Subsidies lower the cost of production, so when they are repealed, costs go up and supply goes down. |
| describe what it means when a product is supply elastic. | It means that the supply of the product changes a great deal when prices go up or down |
| what a surplus signals | price is too high |
| what must happen if a shortage happens | price must rise |
| equilibrium price | the point at which supply and demand achieve balance |
| summarize the meaning of price ceiling and price floor | price ceiling is maximum set price for goods and services set by government and price floor is the price is minimum set price set by government |
| three questions that prices help businesses answer | what to produce? how to produce it? for who to produce it? |
| four advantages of price systems | neutral flexible freedom of choice familiar |
| how price flexibility is one of the strengths of a market economy | price system is able to absorb shocks adjusting to sudden changes. |
Created by:
SGIxTempest