Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
16 Cards in this Set
- Front
- Back
- 3rd side (hint)
|
Scarcity |
Situation where limited resources available unable to satisfy unlimited human wants |
Cost of any activity measured in terms of next best alternative forgone
Production Possibility Curve (PPC) |
|
|
Law of Comparative Advantage Trade
|
can benefit countries if they specialize in goods in which they have a comparative advantage
|
|
|
|
Law of Demand |
Inverse relationship exists between price of good and quantity demanded of good
|
ceteris paribus
|
|
|
Law of Supply
|
Direct relationship exists between price of good and quantity supplied of good
|
ceteris paribus
|
|
|
Price Elasticity of Demand (PED)
|
Degree of responsiveness of quantity demanded of good to a change in its own price
|
ceteris paribus
|
|
|
Income Elasticity of Demand (YED)
|
Degree of responsiveness of demand to a change in income of consumers
|
ceteris paribus
|
|
|
Cross Elasticity of Demand (XED)
|
Degree of responsiveness of demand for one product to a change in price of another
|
ceteris paribus
|
|
|
Price Elasticity of Supply (PES)
|
Degree of responsiveness of quantity supplied of good to a change in its own price
|
ceteris paribus
|
|
|
Consumer Surplus (CS)
|
Excess of price buyers willing and able to pay for good over actual price paid
|
|
|
|
Producer Surplus (PS)
|
Excess of what producer willing and able to put up for sale for a good over actual price paid
|
|
|
|
Deadweight Loss
|
Loss in welfare not gained by anyone in society
|
|
|
|
Tax Incidence
|
Division of tax between consumers & producers
|
|
|
|
Subsidies
|
Fixed amount of money given to producers for each unit sold that lowers cost of good
|
|
|
|
Price Floor (minimum price)
|
Legally established minimum price above market equilibrium price
|
|
|
|
Price Ceiling (maximum price)
|
Legally established maximum price below market equilibrium price
|
|
|
|
Black Market
|
Market where sellers ignore government’s price restrictions & sell illegally at whatever price equates illegal demand & supply |
|
