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17 Cards in this Set
- Front
- Back
- 3rd side (hint)
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What is the definition of Scarcity? |
The condition in which human wants are forever greater than the available supply of time, goods, and resources. |
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Microeconomics defined? |
Studies decision making by a single individual, household, firm, industry, or level of government. |
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Macroeconomics |
Studies the economy as a whole, such as unemployment, inflation, etc... |
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Economics |
The study of how society chooses to set aside its scarce resources to the production of goods and services in order to satisfy unlimited wants. |
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3 Resources or factors of production |
Land, labor, capital |
Money is never a resource. |
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land |
natural resource provided by nature. |
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Labor |
mental and physical capacity of workers to produce goods and services. |
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Capital |
human-made good used to produce other goods and services. |
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Now, what are the Steps in the Model-Building Process? |
1. Identify the problem 2. Develop a model based on simplified assumptions 3. Collect data, test the model, and formulate a conclusion |
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Opportunity cost |
What is lost to gain something else. |
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PPC(Production Possibilities Curve) |
shows the maximum two outputs an economy can produce in a given time period, with the limited resources and technology. |
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law of demand |
The principle that there is an inverse relationship between the price of a good, and the quantity buyers are willing to purchase in a defined time period. |
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Law of supply |
The principle that there is a direct relationship between the price of the good and the quantity sellers are willing and able to offer for sale in a defined time period. |
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Factors that shift the demand curve |
1. Number of buyers: More buyers, shift to the right. 2. Tastes and preferences 3. Income: Normal good (direct), Inferior good (inverse) |
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Factors that shift the supply curve |
1. # of sellers 2. Technology 3. Price of Inputs: Cost of production----> supply 4. Taxes and subsidies |
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Surplus |
When the supply is more than the demand for a good. |
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Shortage |
When the demand is higher than the supply of the good. |
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