Economics Concepts Quiz

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to Lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

What is a positive statement?

Can be tested and validated by collecting data.

What is a normative statement?

Assessed in light of values and opinions.

If current production shifts from consumer goods towards more capital, what is the effect?

Future production possibilities are increased.

What is a capital good?

<p>Provides benefits in the future.</p> Signup and view all the answers

Which country is a good example of a high present rate of investment and a low present rate of consumer goods consumption?

<p>China.</p> Signup and view all the answers

What happens in an imperfect market?

<p>Either buyers, sellers, or both have influence over the prices.</p> Signup and view all the answers

In a market economy, prices adjust so that quantity supplied equals what?

<p>Quantity demanded.</p> Signup and view all the answers

What is market demand?

<p>Sum of individuals' demand.</p> Signup and view all the answers

What is a long run shortage?

<p>Long run quantity demanded - long run quantity supplied.</p> Signup and view all the answers

Why are price floors implemented by the government?

<p>In response to political pressures from suppliers to keep prices high.</p> Signup and view all the answers

Why are price controls necessary?

<p>Goods and services for a normal happy life should be attainable.</p> Signup and view all the answers

How has the international community sought to reduce the negative effects of price floors?

<p>International treaties banned the dumping of surplus production.</p> Signup and view all the answers

If a price ceiling is above equilibrium, it is nonbinding.

<p>True (A)</p> Signup and view all the answers

If a price ceiling is below equilibrium, it is binding and affects the market.

<p>True (A)</p> Signup and view all the answers

After an increase in minimum wage, unemployment is ______ in the long run than the short run.

<p>higher</p> Signup and view all the answers

What are the unintended effects of rent control?

<p>Decreases landlord's profit and makes them not want to keep up the apartment; makes people want to live in houses not apartments.</p> Signup and view all the answers

Rent control units have a -------- ownership turnover rate.

<p>low.</p> Signup and view all the answers

Low income people have an easier time finding somewhere to live in the long term when there's rent control.

<p>False (B)</p> Signup and view all the answers

Why is there a minimum wage when the price ceiling is already non-binding?

<p>It helps low-income voters have hope for a betterment in their situation.</p> Signup and view all the answers

Why is rent control considered an ineffective way to provide housing for low-income people?

<p>The landlords just pass it down from generation to generation.</p> Signup and view all the answers

Flashcards are hidden until you start studying

Study Notes

Economic Statements

  • Positive statement: Can be tested and validated through data collection.
  • Normative statement: Judged based on values and opinions.

Production and Capital Goods

  • Shifting current production from consumer goods to capital goods enhances future production possibilities.
  • Capital good: Provides benefits or returns in the future.

Investment and Consumer Goods

  • China: Example of a country with high current investment rates and low current consumption of consumer goods.

Market Dynamics

  • In an imperfect market, either buyers, sellers, or both can influence prices.
  • In a market economy, prices adjust until quantity supplied equals quantity demanded.
  • Market demand is the total sum of individual demands.

Market Shortages and Controls

  • Long run shortage is calculated as long run quantity demanded minus long run quantity supplied.
  • Price floors are often implemented due to political pressures from suppliers seeking higher prices.
  • Price controls exist to ensure goods and services necessary for a comfortable life are accessible.

Price Ceilings and Market Impact

  • A price ceiling above equilibrium is considered nonbinding and has no effect on the market.
  • A price ceiling below equilibrium is binding and affects the market dynamics.

Employment and Wages

  • After an increase in minimum wage, unemployment is generally higher in the long run compared to the short run.

Rent Control Consequences

  • Unintended effects of rent control include reduced landlord profits, leading to decreased maintenance of apartments and a shift in preference toward houses.
  • Rent-controlled units exhibit low ownership turnover rates.
  • Low-income individuals face challenges in securing long-term housing even with rent control in place.

Minimum Wage Context

  • The existence of a minimum wage, even when a price ceiling is nonbinding, offers low-income voters hope for improving their financial situation.
  • Ineffectiveness of rent control: Many landlords keep rent-controlled units within families, thus limiting accessible housing options for low-income individuals.

Studying That Suits You

Use AI to generate personalized quizzes and flashcards to suit your learning preferences.

Quiz Team

More Like This

Untitled
1 questions

Untitled

AgileRainbow avatar
AgileRainbow
ECO211 Chapter 1 Quiz
49 questions

ECO211 Chapter 1 Quiz

HandsomeVariable avatar
HandsomeVariable
Microeconomics Applications Overview
41 questions
Generating Economic Financial Statements
26 questions
Use Quizgecko on...
Browser
Browser