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13 Cards in this Set
- Front
- Back
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A production possibility frontier illustrates... |
the various combinations of output an economy is currently capable of producing with its limited resources. |
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What's the outcome of governments imposing minimum and maximum prices? |
The equilibrium price being maintained |
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What does the demand for capital goods depend on? |
The volume of consumer goods purchased. |
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How do you measure labour productivity? |
Measure the volume of output that is obtained from each employee. |
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What happens to Good X if it has a negative income elasticity of demand? |
As income falls, the demand for Good X will rise. |
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What happens to Good X if it has a positive income elasticity of demand? |
As income falls, the demand for Good X will fall. |
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A pure public good is always... |
available for consumption by others when consumed by an addition person. |
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What is the IED & PED for a normal good? |
IED: Positive PED: Negative |
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A market is defined as being in equilibrium when... |
there is no tendency for the market price to change. |
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What will happen to Good X if it has a negative elasticity of demand? |
As the price for Good X increases, the demand will rise. |
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What will happen to Good X if it has a negative elasticity of demand? |
As the price of Good X increases, the demand will fall. |
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Why do Public Goods result in market failure? |
In the absence of government intervention, a working market for the product is unlikely to be established. |
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A firm is Productively Inefficient if... |
It can lower its average cost if production by reducing its output. |
