General Study Information Quiz

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Questions and Answers

What is microeconomics?

The study of particular markets and sections of the economy.

What does resource allocation refer to?

The way in which markets decide what goods and services to provide, how to produce them, and who to produce them for.

What causes prices to rise?

Shortages.

What is the market system?

A method of allocating resources through market forces of demand and supply. Signup and view all the answers

What is market equilibrium?

A situation where the quantity demanded equals the quantity supplied for a good. Signup and view all the answers

What is demand?

The willingness and ability to buy a product. Signup and view all the answers

What is effective demand?

The willingness to buy that is backed by the ability to pay for the purchase. Signup and view all the answers

What is quantity demand?

Effective demand for a particular good. Signup and view all the answers

The Law of Demand states that as price increases, demand decreases.

True (A) Signup and view all the answers

What is a demand curve?

A graphical representation of the relationship between the price of a good and the quantity demanded at each price. Signup and view all the answers

What is individual demand?

Demand from one customer. Signup and view all the answers

What is market demand?

Total (aggregate) demand; the sum of all individual demands of consumers. Signup and view all the answers

What is supply?

The willingness of producers to supply a good or service at a given price. Signup and view all the answers

What is quality supplied?

The amount of goods producers are willing to make and supply. Signup and view all the answers

What is market supply?

The amount of goods all producers supplying the product are willing to supply. Signup and view all the answers

The Law of Supply states that as price increases, supply increases.

True (A) Signup and view all the answers

What is a supply curve?

A graphical representation of the relationship between the price of a good and the quantity supplied at each price. Signup and view all the answers

What is price determination?

The process of finding the equilibrium price and quantity in a market. Signup and view all the answers

Define market equilibrium.

The state where the quantity demanded equals the quantity supplied. Signup and view all the answers

Define equilibrium price.

The price at which the demand curve intersects the supply curve. Signup and view all the answers

Define equilibrium quantity.

The quantity demanded or supplied at the equilibrium price. Signup and view all the answers

What causes price changes?

Changes in supply or demand. Signup and view all the answers

What is price elasticity of demand?

The responsiveness of demand to a change in price. Signup and view all the answers

What is price elasticity of supply?

The responsiveness of supply to a change in price. Signup and view all the answers

What is a market economic system?

An economic system that relies on market forces of demand and supply to allocate resources. Signup and view all the answers

What is a planned economy?

An economic system that relies on the government to allocate resources. Signup and view all the answers

What is market failure?

A situation where market forces fail to allocate resources efficiently and a situation where the social costs of production exceed the social benefits. Signup and view all the answers

What are external costs?

Negative side-effects of production and consumption that are incurred by third parties for which no compensation is paid. Signup and view all the answers

What are external benefits?

Positive side-effects of production and consumption that are experienced by third parties for which no money is paid. Signup and view all the answers

What are social costs?

The sum of private costs and external costs. Signup and view all the answers

What are social benefits?

The sum of private benefits and external benefits. Signup and view all the answers

What are public goods?

Goods or services that are non-excludable and non-rivalrous. Signup and view all the answers

What are demerit goods?

Goods or services that generate negative spillover effects in the economy when consumed. Signup and view all the answers

What is a monopoly?

A market structure where there is a single supplier of a product. Signup and view all the answers

What is geographical immobility?

A situation where factors of production are unable to move to areas where they are most needed. Signup and view all the answers

What is occupational immobility?

A situation where workers are unable to move to jobs where they are most needed. Signup and view all the answers

What is information failure?

A situation where people lack sufficient information to make informed decisions about consumption or production. Signup and view all the answers

Flashcards

Microeconomics

Study of individual markets and parts of the economy.

Macroeconomics

Study of whole economy behavior and decision-making.