Additional Work From Practice Homework

Front 1

Low Level of inflation is

Back 1

Primary Economic Goal

Front 2

Low Unemployment is

Back 2

Primary Economic Goal

Front 3

Growth in the Standard of living is

Back 3

Primary Economic Goal

Front 4

A Sustainable trade balance is

Back 4

Primary Economic Goal

Front 5

Marginal Utility

Back 5

of a good or service is the gain from an increase or loss from a decrease in consumption of that good or service

Front 6

Three components of interest rates

Back 6

risk premium, expected rate of inflation, time value of money

Front 7

Country A & B, A has high risk premium, while B has low, what does this indicate?

Back 7

higher interest rate for A

Front 8

High risk premium implies that bond investors...

Back 8

would demand higher interest rates to compensate for the higher risk of defaulting

Front 9

Country A &B, A has low expected rate of inflation and B has high, what does this indicate/

Back 9

higher inflation erodes the future value of B's bonds

Front 10

High expected rate of inflation implies....?

Back 10

higher interest rate, as investors would demand higher interest rates to offset higher inflation

Front 11

Opportunity cost is

Back 11

what you must give up when you make a decision

Front 12

What factors into the opportunity cost for a decision?

Back 12

1. The Actual financial cost of decision, 2. Time spent due to decision. 3. Benefits from the best forgone alternative

Front 13

Positive Statements describe....

Back 13

the way the world is

Front 14

Normative Statements describe...

Back 14

the world the way it should be

Front 15

Which type of statements make value judgments?

Back 15

Normative

Front 16

Households are demanders in

Back 16

The market for goods and services

Front 17

Households are suppliers in

Back 17

The Labor Market, The financial Capital Market

Front 18

In the circular flow diagram, payments...

Back 18

always go from buyer

Front 19

How to find the market demand curve

Back 19

sum the quantities (horizontally) of the individual demand curves of all the consumers

Front 20

The firm sends back payments in the form of

Back 20

interest and dividends

Front 21

The market demand curve displays the ....

Back 21

the quantity of a particular good or service at any given price for all consumers

Front 22

Grocers are selling more gluten free pasta than ever before, even though the price of gluten free pasta has dropped substantially

Back 22

Shift of Supply Curve

Front 23

After discovering that flash steaming tuna first, before using mechanical processes to extract meat, removes more tuna flesf, more cans of tuna hit the shelves of all major grocers

Back 23

Shift of the Supply Curve

Front 24

Amplitude decides to join the smartphone market

Back 24

shift of the supply curve

Front 25

Rising wages for igloos builders in Nunavut, Canada, result in igloo builders moving to Nunavut

Back 25

movement along the supply curve

Front 26

A national consumer products company produces less of its premium quality soap as a result of lower soap prices

Back 26

Movement along the supply curve

Front 27

Americans put up their gold and silver jewelry for sale as a result of rising prices

Back 27

Movement along the supply curve

Front 28

Shifts of the supply curve reflect....

Back 28

a change in the quantity supplied of a paricular good at all prices

Front 29

What does it mean when interest rates are low?

Back 29

price received from supplying money is low

Front 30

What is the effect on quantity, despite the fact that interest rates are low?

Back 30

the quantity supplied is greater

Front 31

Reasons why a supply curve can shift

Back 31

change in technology, number of producers

Front 32

Movement along the supply curve is reflective of a change in...

Back 32

the quantity supplied as a result of some price change

Front 33

If producers have less costly inputs available, they...

Back 33

are able to produce more end products at any given price

Front 34

What happens to the curve when producers have less costly inputs available?

Back 34

the supply curve shifts down (or to the right), equilibrium has higher quantity and a lower price

Front 35

How does the equilibrium point shift when producers have less costly inputs available?

Back 35

New equilibrium where demand meets the new supply, has a higher quantity and lower price

Front 36

What is the effect of substitutes/

Back 36

draws away would-be consumers of a product, resulting in lower demand

Front 37

What does lower demand imply on a graph?

Back 37

Demand curve shifts to the left

Front 38

If supply shifts more than demand....

Back 38

the equilibrium quantity increases

Front 39

If demand shifts more than supply,

Back 39

quantity decreases

Front 40

If supply and demand shift at the same amount...

Back 40

quantity stays the same

Front 41

The only way for both price and quantity to increase in the face of decreasing supply is if...

Back 41

there is an increase in demand that outweighs the decrease in supply

Front 42

Example of Price Ceiling

Back 42

Government making it illegal to charge a price above a certain threshold

Front 43

Example of Consumer Surplus

Back 43

The difference between what a person is willing to pay for a good and what they actually pay

Front 44

Example of Price Floor

Back 44

When the price of a good is forced above the equilibrium price.

Front 45

Example of Deadweight Loss

Back 45

A measure of the reduction in social welfare associated with an inefficient outcome

Front 46

Price Ceiling:

Back 46

A max price that can be legally charged for a good

Front 47

Consumer Surplus:

Back 47

The difference between what a consumer is willing to pay for a good and the price that is paid

Front 48

Price Floor:

Back 48

A minimum price that can be legally charged for a good

Front 49

Deadweight loss:

Back 49

the reduction in social surplus associated with deviating from the equilibrium.

Front 50

Price Floors and Price Ceilings typically result in

Back 50

deadweight loss

Front 51

with price floor, Setting a minimum price below the equilibrium price will...

Back 51

not change the demand or supply since sellers and buyers already have a better equilibrium price available

Front 52

Price ceilings can create....

Back 52

shortages of a good

Front 53

Maximum prices can create

Back 53

shortages of a good

Front 54

If price is set above the equilibrium price....

Back 54

the price ceiling will have no effect

Front 55

When the price of an input increases...

Back 55

the supply for the complement will decrease

Front 56

A decrease in supply shifts ....

Back 56

the supply curve to the left (or in)

Front 57

When the supply curve decreases,

Back 57

the equilibrium price of item increases and the equilibrium quantity of the item decreases

Front 58

When the price of an input increase, does that shift the supply or demand curve?

Back 58

Supply curve

Front 59

Equilibrium occurs when

Back 59

quantity supplied equals quantity demanded

Front 60

Which of the following is most likely to be a complement to coffee?

Back 60

Creamer

Front 61

Assume that a monsoon destroys the coffee crop in Vietnam, one of the world's largest coffee producers. What will likely occur?

Back 61

Consumer will try to find alternatives to coffee due to increases in the price of coffee

Front 62

Two goods are complements when they are often ...

Back 62

used together or in combination

Front 63

Two goods are substitutes if they can be...

Back 63

used in place of one another