is the price where buyers and sellers agree

Imperfect competition

Sellers are price-setters, but within narrow limits

as price increases, demand decreases.

what you give up when you make a choice

Law of Diminishing Utility

each TV you get is less useful to you

as price increases, supply increases

Equilibrium exists in the market when . . .

quantity demanded equals quantity supplied.

An increase in demand means:

buyers will take a larger quantity.

Production possibility curves show:

To make more of something, reduce the production of another.

Levels of competition, in order, from least competitive to most competitive.

monopoly, oligopoly, imperfect comp, perfect comp

Elasticity of Demand means:

demand will change with changes in price.

is often set by the seller based on his costs.

If the utility or usefulness of a product increases:

the demand for that product will increase.

Perfectly competitive market:

means many sellers, all selling exactly the same thing

If demand is very elastic, it means:

a change in price will effect quantity demanded and TR.

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Econ - Unit Exam #1

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Questions 30

Answers

1
Competition in the market:
has little influence on price.
always exists.
has little impact on the buyer.
2
Fundamental problem of economics?
scarcity
inflation
pollution
unemployment
3
Equilibrium Price
is always set by the supplier
is the price where buyers and sellers agree
never changes
will be high if there is a surplus of products
4
Resources, or factors of production.
unlimited in quantity
have no value
land, labor, capital
rent, wages, interest
5
Imperfect competition
Seller can raise price, and never lose any customers.
prices will be very high for consumers
Sellers are price-setters, but within narrow limits
Only 3 - 4 sellers
6
Law of Demand
as price increases, demand decreases.
as supply increases, demand decreases.
as demand decreases, price decreases.
7
A monopolist controls the entire supply side of the market.
True
False
8
Why do oligopolists hesitate to reduce prices?
They don't like to make money.
They might become a monopoly.
Price Wars may result
9
Opportunity Cost
willingness and ability
the cost to produce something
what you pay for goods
what you give up when you make a choice
10
Production
creation of utility
same as consumption
creation of demand
creation of diminishing utility
11
Law of Diminishing Utility
the more TV's you have, the more you want
each TV you get is less useful to you
decreased utility means increased value
scarcity forces consumers to make choices
12
Law of Supply
as price increases, supply increases
as price increases, demand increases
as supply increases, price decreases
as price decreases, demand increases
13
Equilibrium exists in the market when . . .
every product is purchased.
every buyer has all of the products they want.
product prices equal costs of production.
quantity demanded equals quantity supplied.
14
Where are you most likely to find price wars?
perfect competition
imperfect competition
oligopoly
monopoly
15
Law of Demand: Which has the most influence?
seller profit
opportunity costs
taxes
price
16
Opportunity costs exist because . . .
we have too much land, labor, and capital.
economies always use the factors of production efficiently.
there is too much surplus.
choices have to be made.
17
Oligopoly:
product differentiation does not exist
there is one seller
seller has total control over equilibrium price
there are 2 - 5 sellers
18
An increase in demand means:
the demand curve will move to the left.
buyers will take a larger quantity.
the price will fall.
19
What is economics?
Willingness and ability to give up something of value.
Scarcity
Study of life.
The study of making choices.
20
Best example of land, labor, capital (in that order).
trees, accountant, buffalo
trees, lawyers, garbage truck
farmers, trees, garbage truck
land, rent, money
21
Production possibility curves show:
all of a nation's resources will automatically be used.
we always produce at 100%.
increasing technology means less production.
To make more of something, reduce the production of another.
22
Levels of competition, in order, from least competitive to most competitive.
monopoly, oligopoly, imperfect comp, perfect comp
perfect comp, imperfect comp, monopoly, oligopoly
perfect comp, imperfect comp, oligopoly, monopoly
monopoly, oligopoly, perfect comp, imperfect comp
23
Elasticity of Demand means:
the demand curve cannot change.
demand will change with changes in price.
demand will stay the same, even if the price changes.
demand curve will be nearly straight up and down.
24
Price:
is always set by the buyer.
is perfectly stable and never changes.
is often set by the seller based on his costs.
will be inflated if there is a surplus in the market.
25
If the utility or usefulness of a product increases:
then nobody will want it.
the price for the product will go down.
the value of the product will decrease.
the demand for that product will increase.
26
Monopoly
2 to 5 sellers
Many sellers
One seller
27
Perfectly competitive market:
means many sellers, all selling exactly the same thing
involves advertising
will always have high prices
means many sellers, each having some control over price
28
Prices are usually lowest for a product when there is:
inflation
monopoly
only one company making it.
competition
29
If demand is very elastic, it means:
a change in price will effect quantity demanded and TR.
TR will increase as price increases.
the demand curve will be nearly straight up and down.
demand will not change if price changes.
30
A point on a production possibility line indicates:
there are resources not being used.
all resouces are being used.
more can be produced if resources are used more efficiently.

Econ - Unit Exam #1 Flashcards | StudBud