What are the four types of market structures?
Perfect Competition, Monopolistic Competition, Oligopoly, Monopoly
What is a key characteristic of a monopoly?
A single seller controls the entire market with high barriers to entry.
What happens to price when demand increases and supply remains constant?
Price increases.
What happens to equilibrium quantity when supply decreases?
It decreases.
What is consumer surplus?
The difference between what consumers are willing to pay and what they actually pay.
What is producer surplus?
The difference between the price producers receive and their minimum acceptable price.
What does a positive cross-price elasticity indicate?
The goods are substitutes.
What does a negative cross-price elasticity indicate?
The goods are complements.
What happens when the Fed buys bonds?
Money supply increases.
What happens when the Fed increases the Discount Window Rate (DWR)?
Money supply decreases.
What happens to aggregate demand when the required reserve ratio decreases?
Aggregate demand increases.
What does the 'P' in PINTE stand for?
Price of related goods (substitutes and complements).
What does the 'I' in PINTE stand for?
Income (normal and inferior goods).
What does the 'N' in PINTE stand for?
Number of buyers.
What does the 'T' in PINTE stand for?
Tastes and preferences.
What does the 'E' in PINTE stand for?
Expectations of future prices.
What does the 'i' in iNOTE stand for?
Input prices.
What does the 'N' in iNOTE stand for?
Number of sellers.
What does the 'O' in iNOTE stand for?
Outside options of sellers.
What does the 'T' in iNOTE stand for?
Technology (productivity improvements).
What does the 'E' in iNOTE stand for?
Expectations of future price changes.
What is the main benefit of FDI for the host country?
Increased capital investment and job creation.
What is a common drawback of FDI?
Potential exploitation of resources and local businesses.
What does the 'Contender' strategy mean?
Competing head-to-head by transferring skills globally.
What does the 'Dodger' strategy mean?
Selling out or partnering to avoid direct competition.
What does the 'Defender' strategy mean?
Leveraging home-market strengths to defend against MNEs.
What does the 'Extender' strategy mean?
Expanding a successful local business into similar foreign markets.
What is a command economy?
An economic system where the government makes all production and pricing decisions.
What is a mixed economy?
A system combining private enterprise with some government control.
What is a totalitarian government?
A government with complete control over all aspects of public and private life.
What does GDP measure?
The total value of goods and services produced in a country.
What is deadweight loss?
The loss of total surplus due to market inefficiencies like tariffs or taxes.
How do tariffs impact consumers?
They increase prices and reduce consumer choice.
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