D089 Principles of Economics - Set 5 - Part 3

Correct Answer: Trade that involves no tariffs, quotas, or restrictions between countries

Free trade allows goods and services to be exchanged between countries without barriers like tariffs, quotas, or government-imposed restrictions, promoting global commerce.

Correct Answer: A good that is non-excludable and non-rivalrous

Public goods, such as clean air or national defense, can be consumed by everyone without reducing their availability to others, and no one can be excluded from their benefits.

Correct Answer: It makes imported goods more expensive and protects domestic industries

High tariffs increase the price of imported goods, making them less competitive with domestic products and giving an advantage to local industries.

Correct Answer: A market where many firms sell similar products and no single firm can influence the price

A competitive market is characterized by many firms offering similar products, with none able to control prices, as prices are determined by supply and demand.

Correct Answer: The idea that the satisfaction gained from consuming additional units of a good decreases as more is consumed

The principle of diminishing marginal utility states that as a person consumes more of a good, the additional satisfaction from consuming each extra unit decreases.

Correct Answer: To negotiate for better wages, working conditions, and benefits for employees

Trade unions represent the collective interests of workers and negotiate with employers for improved wages, working conditions, and benefits.

Correct Answer: The relationship between price and the quantity supplied of a good

A supply curve shows how much of a good producers are willing to supply at different price levels, typically upward sloping, indicating higher quantities at higher prices.

Correct Answer: A global organization that ensures trade flows smoothly, predictably, and freely

The WTO is an international organization that works to facilitate global trade by reducing trade barriers and resolving trade disputes among member countries.

Correct Answer: To set minimum or maximum prices for goods and services to prevent shortages or surpluses

Government price controls, such as price ceilings and price floors, are used to regulate prices in markets where supply and demand might lead to unfair outcomes.

Correct Answer: It results in lower levels of production and higher unemployment

A decrease in aggregate demand reduces the overall demand for goods and services in the economy, leading to lower production levels and higher unemployment.