Again

Front 1

what determines the value of a model?

Back 1

if it yields usavble predictions that are supported by real-world observations. (empirical)

Front 2

what is positive/normative economics?

Back 2

positive: looking at things as they are.
normative: looking at things as they ought to be.(personal opinion).

Front 3

what economics does the problem of scarcity apply to?

Back 3

resources/choices

Front 4

what are resources?

Back 4

land,labor, physical capital, human capital, and entrepenuership.

Front 5

what is production?

Back 5

any activity that results in the conversion of resources into products that can be used in consumption.

Front 6

what makes it difficult to satisfy all our wants?

Back 6

what have unlimited wants/needs

Front 7

what is opportunity cost?

Back 7

the highest-valued, next-best alternative that must be sacrificed to obtain something or to satisfy a want.

Front 8

what does produciton possibilites curve represent?

Back 8

all combinations of maximum outputs that could be produced assuming a fixe amont of productive resoruces of a given quality. efficiency.

Front 9

what is economic growth and how can it be shown on a production possibilites curve?

Back 9

increased production of goods, shift to the right

Front 10

what is absolute advantage?

Back 10

ability to produce the same quantity of a good or service using fewr units of labor or resource inputs

Front 11

what is comparative advantage?

Back 11

trade on the basis of opportunity cost. when you have the lower opportunity cost.

Front 12

what is demand?

Back 12

willingness/ability to purchase various products at certain times.

Front 13

what is a demand schedule?

Back 13

table that shows the price of a good and the quantity that would be demanded.

Front 14

what is a demand curve?

Back 14

graph representation of the schedule; a negatively sloped line shoowing the inverse reltiaonship between the price and the quantity demanded (other things equal)

Front 15

what does the law of demand state?

Back 15

observation that there is a negative, or inverse, realtionship between the price of any good or service and the quantity demanded, holding other factors equal.

Front 16

what is market demand and how is it calculated?

Back 16

demand of all consumers in the marketplace for a particular good/service. the summation oat each price of the quantity demanded by each individual.

Front 17

what is change in demand?

Back 17

one of 4 changes

Front 18

what is change in quantity demanded?

Back 18

only price changes

Front 19

what are inferior goods?

Back 19

increase income, decrease demand

Front 20

what are normal goods?

Back 20

demand rises as income rises.

Front 21

what are the determinants of demand?

Back 21

income, taste/preferences, expectations, and market size.

Front 22

what are complimentary goods?

Back 22

when a change in the price of one causes an opposite shift in the demand for the other. conjoinly.

Front 23

what are substitute goods?

Back 23

whom a change in the price of one causes a shift in demand for the other in the same direction as the price change.

Front 24

what does the law of supply state?

Back 24

at higher prices, a larger quantity will generally be supplied than at lower prices, all things equal. at lower prices, a smaller quantity will generally be supplied than at a higher price.

Front 25

what is meant by equilibrium price?

Back 25

when quantity supplied equals quantity demanded at a particular price.

Front 26

what is a market(price) system?

Back 26

where relative prices are constantly changing to reflect changes in supply and demand for different commodities. The prices are signals to everyone w/in the system as to what is realtively scarce and what is abundant.

Front 27

what makes a market system efficient?

Back 27

exchange and markets, lower transaction costs, and middlemen.

Front 28

what is the difference between an increase in supply and in quantities supplied?

Back 28

increase in supply=shfit
quantity supply= along curve.

Front 29

what are the different types of raitioning methods?

Back 29

rationing by waiting
rationing by random assignmnet

Front 30

what are price ceilings?

Back 30

legal maximum that may be charged for a particular good/service

Front 31

what are price floors?

Back 31

legal minimum price below which a g/s may not be sold.

Front 32

what is an effective price floor/ceiling?

Back 32

price floor- minimum wage
price ceiling-rent control

Front 33

what is a market failure?

Back 33

situation in which the market economy leads to too few or too many resources going to a specific economic activity

Front 34

what is an externality?

Back 34

a consequence of an economic activity that spills over to affect third parties.

Front 35

what is a negative externaltiy?

Back 35

produces harm, like pollution

Front 36

what is a postive externality?

Back 36

produces a beneficial outcome, like education

Front 37

what ways does the government use to correct externalities?

Back 37

special taxes (effluent fee), regulation, gov. financing and production, subsides.

Front 38

what is a public good?

Back 38

goods for which the principle of rival consumption does not apply. they can be jointly consumed by many individuals at the same time at no additional cost and with no reduction in quality/quantity. Cannot be denied even if not paid.

Front 39

what is antitrust legislation and what is its purpose?

Back 39

laws that restrict the formation of monopolies and regulate certeain anticompetitive business pratices. makes certian economic activites that might restrain trade illegal

Front 40

what is a free-rider problem?

Back 40

when individuals presume that others will pay for public goods so that, individually, they can excape paying for their protection without causing a reduction in production.