Econ #1

Front 1

What is Economics?

Back 1

the study of choices made under the conditions of scarcity

Front 2

Scarcity

Back 2

situation in which resources are limited and can be used in different ways so one good or service must be sacrificed for another

Front 3

Microeconomics

Back 3

deal with the behavior of the individual economic units. These units include consumers, workers, investors etc.

Front 4

Macroeconomics

Back 4

deal with the aggregate economis quantities such as GDP, unemployment, inflation, etc.

Front 5

Positive economics

Back 5

analysis the answer the questions "what is" or "what will be"

Front 6

normative economics

Back 6

Analysis that answers the question "what ought to be"

Front 7

Ceteris Paribus

Back 7

all else being equal

Front 8

Opportunity Cost

Back 8

-what you give up to get something
-the next best alturnative

Front 9

Production Possibility Curve (PPC)

Back 9

a curve that shows the possible combinations of products that an economy can produce provided all factors of production (inputs) are used fully and efficiently

Front 10

Principle of increasing opportunity cost

Back 10

as you move down along the curve, it cost more of good y to produce good x

Front 11

Marginal Principle

Back 11

increase the level of an activity if its MB exceeds MC, reduce the level of an activity if MC exceeds MB

Front 12

Inputs

Back 12

-factors of production
-things used in the production process

Front 13

Outputs

Back 13

goods and services

Front 14

Marginal Product (MP)

Back 14

the amount of output produced by an additional unit of input

Front 15

Total Product (TP)

Back 15

The amount of output produced by all the units of input

Front 16

Comparative Advantage

Back 16

When a person or country can produce a product at a lower opp. cost than another person or nation

Front 17

Real Nominal Principle

Back 17

what matters to people is the value of money or income (its purchasing power) no the face value of money or income.

Front 18

Absolute Advantage

Back 18

occurs when a person or nation can produce a product at a lower absolute cost than another person

Front 19

Principle of Comparative Advantage

Back 19

everyone does best when each person or country concentrates on the activity for when the opp cost is lower

Front 20

Factors that shift the economy (PPC)

Back 20

-resources
-population
-technology

Front 21

Market Economy

Back 21

trade things for what they want with what they have

Front 22

Centrally Planned Economy

Back 22

economy in which a government decides what goods to produce, how to produce them and who consumes them

Front 23

Market Failure

Back 23

when markets does operate efficiently
-external costs
-external benefit
-imperfect information

Front 24

Demand

Back 24

is the relationship that indicates the quantity of a commodity that consumers are willing and able to buy at each price

Front 25

Law of Demand

Back 25

there is a negative relationship between price and quantity demanded

Front 26

What factors affect demand?

Back 26

income
price
# of buyers
expectations

Front 27

Normal Good

Back 27

demand increases and income increases

Front 28

Inferior good

Back 28

demand deceases and income increases

Front 29

Substitutes

Back 29

if an increase in price of one good leads to an increase in demand for another good and vice versa

Front 30

Complements

Back 30

if an increase in price of one good leads to a decrease in demand for another good and vice versa

Front 31

Change in Demand

Back 31

refers to a shift in the entire demand curve caused by other factors except price

Front 32

Change in Quantity Demanded

Back 32

refers to a movement along the unchanged demand curve due to the change in price

Front 33

Market Demand

Back 33

shows the relationship between price and quantity demanded for all consumers in the mkt

Front 34

Supply

Back 34

relation showing how much of a product produces are willing and able to supply at each peice

Front 35

Law of Supply

Back 35

there is a positive relationship between rice and quantity supplied

Front 36

Market supply curve

Back 36

shows the relationship between price and Qd for all producers in the market

Front 37

Market Equilibrium

Back 37

situtation in which quantity of the product demanded Qd is equal to the quantity of product supplied Qs

Front 38

Disequilibrium

Back 38

excess demand (ED)
-occurs when the current price is below egm price Qd>Qs

Front 39

Excess Supply

Back 39

occurs when the current price is above the eqm price Qd<Qs

Front 40

Price Elasticity of Demand

Back 40

measures the resopnsiveness of the change in quantity demanded to the change in price

Front 41

Elastic Demand

Back 41

Ed is greater than 1.
When demand is price elastic the demand curve is relatively flat

Front 42

Inelastic Demand

Back 42

Ed is less than 1
When demand id price inelastic the demand curve is relatively steep

Front 43

Unitary elastic demand

Back 43

Ed is 1

Front 44

Perfectly Inelastic Demand

Back 44

when demand is perfectly inelastic the Qd doesn't change as price changes
-Demand curve is verticle

Front 45

Perfectly Elastic Demand

Back 45

demand curve it horzontal
-meaning that only one price is possible

Front 46

Change in Demand

Back 46

refers to a shift in the entire demand curve caused by other factors except price

Front 47

Change in Quantity Demanded

Back 47

refers to a movement along the unchanged demand curve due to the change in price

Front 48

Market Demand

Back 48

shows the relationship between price and quantity demanded for all consumers in the mkt

Front 49

Supply

Back 49

relation showing how much of a product produces are willing and able to supply at each peice

Front 50

Law of Supply

Back 50

there is a positive relationship between rice and quantity supplied

Front 51

Market supply curve

Back 51

shows the relationship between price and Qd for all producers in the market

Front 52

Market Equilibrium

Back 52

situtation in which quantity of the product demanded Qd is equal to the quantity of product supplied Qs

Front 53

Disequilibrium

Back 53

excess demand (ED)
-occurs when the current price is below egm price Qd>Qs

Front 54

Excess Supply

Back 54

occurs when the current price is above the eqm price Qd<Qs

Front 55

Price Elasticity of Demand

Back 55

measures the resopnsiveness of the change in quantity demanded to the change in price

Front 56

Elastic Demand

Back 56

Ed is greater than 1.
When demand is price elastic the demand curve is relatively flat

Front 57

Inelastic Demand

Back 57

Ed is less than 1
When demand id price inelastic the demand curve is relatively steep

Front 58

Unitary elastic demand

Back 58

Ed is 1

Front 59

Perfectly Inelastic Demand

Back 59

when demand is perfectly inelastic the Qd doesn't change as price changes
-Demand curve is verticle

Front 60

Perfectly Elastic Demand

Back 60

demand curve it horzontal
-meaning that only one price is possible

Front 61

Change in Demand

Back 61

refers to a shift in the entire demand curve caused by other factors except price

Front 62

Change in Quantity Demanded

Back 62

refers to a movement along the unchanged demand curve due to the change in price

Front 63

Market Demand

Back 63

shows the relationship between price and quantity demanded for all consumers in the mkt

Front 64

Supply

Back 64

relation showing how much of a product produces are willing and able to supply at each peice

Front 65

Law of Supply

Back 65

there is a positive relationship between rice and quantity supplied

Front 66

Market supply curve

Back 66

shows the relationship between price and Qd for all producers in the market

Front 67

Market Equilibrium

Back 67

situtation in which quantity of the product demanded Qd is equal to the quantity of product supplied Qs

Front 68

Disequilibrium

Back 68

excess demand (ED)
-occurs when the current price is below egm price Qd>Qs

Front 69

Excess Supply

Back 69

occurs when the current price is above the eqm price Qd<Qs

Front 70

Price Elasticity of Demand

Back 70

measures the resopnsiveness of the change in quantity demanded to the change in price

Front 71

Elastic Demand

Back 71

Ed is greater than 1.
When demand is price elastic the demand curve is relatively flat

Front 72

Inelastic Demand

Back 72

Ed is less than 1
When demand id price inelastic the demand curve is relatively steep

Front 73

Unitary elastic demand

Back 73

Ed is 1

Front 74

Perfectly Inelastic Demand

Back 74

when demand is perfectly inelastic the Qd doesn't change as price changes
-Demand curve is verticle

Front 75

Perfectly Elastic Demand

Back 75

demand curve it horzontal
-meaning that only one price is possible

Front 76

Change in Demand

Back 76

refers to a shift in the entire demand curve caused by other factors except price

Front 77

Change in Quantity Demanded

Back 77

refers to a movement along the unchanged demand curve due to the change in price

Front 78

Market Demand

Back 78

shows the relationship between price and quantity demanded for all consumers in the mkt

Front 79

Supply

Back 79

relation showing how much of a product produces are willing and able to supply at each peice

Front 80

Law of Supply

Back 80

there is a positive relationship between rice and quantity supplied

Front 81

Market supply curve

Back 81

shows the relationship between price and Qd for all producers in the market

Front 82

Market Equilibrium

Back 82

situtation in which quantity of the product demanded Qd is equal to the quantity of product supplied Qs

Front 83

Disequilibrium

Back 83

excess demand (ED)
-occurs when the current price is below egm price Qd>Qs

Front 84

Excess Supply

Back 84

occurs when the current price is above the eqm price Qd<Qs

Front 85

Price Elasticity of Demand

Back 85

measures the resopnsiveness of the change in quantity demanded to the change in price

Front 86

Elastic Demand

Back 86

Ed is greater than 1.
When demand is price elastic the demand curve is relatively flat

Front 87

Inelastic Demand

Back 87

Ed is less than 1
When demand id price inelastic the demand curve is relatively steep

Front 88

Unitary elastic demand

Back 88

Ed is 1

Front 89

Perfectly Inelastic Demand

Back 89

when demand is perfectly inelastic the Qd doesn't change as price changes
-Demand curve is verticle

Front 90

Perfectly Elastic Demand

Back 90

demand curve it horzontal
-meaning that only one price is possible

Front 91

Determinants of Elasticity

Back 91

-Availibility of substitutes
-Product's share in the consumer budget
-Time