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Questions and Answers
What does elasticity refer to in the context of demand and supply?
What does elasticity refer to in the context of demand and supply?
- The maximum amount consumers are willing to pay
- The total quantity supplied at a given price
- The total revenue generated from sales
- The degree of responsiveness to a change in price or non-price determinant (correct)
Which of the following statements about market structures is true?
Which of the following statements about market structures is true?
- Oligopoly consists of many small firms competing with each other
- Monopoly is characterized by many sellers offering homogenous products
- Perfect competition allows for significant influence on price by individual sellers
- Imperfect competition includes markets that do not meet the criteria for perfect competition (correct)
What is the definition of a price ceiling?
What is the definition of a price ceiling?
- The minimum price that can be charged for a product
- A type of tax imposed on goods sold
- The highest price that sellers can charge for goods, often dictated by the government (correct)
- The market price at which supply equals demand
What defines elastic demand or supply?
What defines elastic demand or supply?
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How is minimum wage defined?
How is minimum wage defined?
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In the context of labor force, who is included?
In the context of labor force, who is included?
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Which characteristic accurately describes monopolistic competition?
Which characteristic accurately describes monopolistic competition?
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What is true about rent in an economic context?
What is true about rent in an economic context?
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Study Notes
Key Economic Concepts
- Technology is the application of scientific knowledge to production methods.
- Market equilibrium occurs when quantity demanded equals quantity supplied at a specific price.
- Rent refers to payment for land use, paid to the landowner.
- A price ceiling is the maximum price a seller can charge for goods, typically enforced by the government.
Elasticity
- Elasticity measures how demand and supply respond to changes in price or non-price factors.
- Elastic demand/supply shows a greater proportional change in response to determinants (elasticity coefficient > 1).
- Inelastic demand/supply exhibits a lesser proportional change (elasticity coefficient < 1).
- Unitary elastic demand/supply indicates equal proportional change (elasticity coefficient = 1).
Market Structures
- Market structure defines the competitive environment for buyers and sellers.
- Perfect competition features numerous small buyers and sellers offering homogeneous goods, with no individual price impact.
- Imperfect competition exists when at least one condition of perfect competition is absent.
- A monopoly consists of a single producer with no close substitutes available.
- Monopolistic competition includes many sellers with differentiated but highly substitutable products (e.g., automotive brands, fast food chains).
- Oligopoly involves a few sellers controlling most of the production, with products that may be similar or differentiated, and significant entry barriers.
Labor Market and Population
- The labor force comprises individuals aged 15 and over who are able and willing to work, including both employed individuals and those actively seeking work.
- Population refers to all residents of a specific area, such as a town or country.
Wage Factors
- Wages represent regular compensation paid to employees, typically on a daily or weekly basis.
- Minimum wage is the lowest legally permitted wage, with penalties for employers who pay below this threshold.
Foreign Exchange and Savings
- The foreign exchange rate is the conversion rate of the Philippine peso against other currencies, like the US dollar.
- Savings is the portion of earnings not spent on consumption or tax obligations.
- Investment signifies the accumulation of capital stock to boost future production while sacrificing immediate consumption.
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