Copy of Econ Quiz Review

Rewards

________ or penalties that motivate behavior.

demand

When the ________ is higher than the quantity supplied.

maximum price a product

The ________ is allowed to be below the equilibrium causes shortage.

Specialization

Making just one thing a million times is faster than learning and making a bunch of little things

Pippet

population, income, price of substitutes,price of complements, expectations, taste

Gross domestic product

value of finished goods and services produced in a country

incentives

rewards or penalties that motivate behavior

examples of incentives

money time food sex power fame

what do incentives do

enforce the market equilibrium

the great economic problem

how to use or limited resources to satisfy our unlimited demands

margin

one less or one more

absolute advantage

least resources/most efficient

comparitive advantage

least opportunity cost

benefits of trade

increases productivity, value, specialization, scaling

trade division of knowledge and specialization

by utilizing trade it allows more specialization to occur, specialization increases the knowledge in the specialty

demand

how much is demanded at a certain price can be shifted by pippet(population income subsitutes compliments expectations taste),

curves

increases shift right, decreases in supply or demand shift left.

as price changes how does quantity demanded change

as prices increase quantity demanded decreases

as price changes how does quantity supplied change

as price increases quantity supplied increases

equilibrium

price at which the quantity supplied and demanded are the same

surplus

when the quantity supplied is more than demanded causes a price decrease

shortage

when the quantity demanded is more than the quantity supplied increases prices

prices

indicate the demand and value of the product and how much a consumer wants it

price ceilings and impacts

the max price allowed, causes shortages bribes lines and lower quality

price floors and impact

min price legally allowed, causes surplus deadweight loss misuse of recourses

deadweight loss and lost gains from trade

the loss of consumer and producer surplus/what you are missing out on if you are not at equilibrium,

nominal

not adjusted for inflation

intermediate products

a good used to produce another good

final good

ready to be sold to consumer

national spending approach

consumptions+investments+gov spending+(exports-imports)

gdp and weaknesses

gross domestic product(value of finished goods and services) doesn't count for underground econ, distribution of wealth, environmental damage, health, or unpriced goods and services

gdp vs gdp per capita

capita measures a standard of living used for easy comparisons