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13 Cards in this Set
- Front
- Back
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The Factors of Production |
Land, Labour, Capital, Enterprise |
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Micro vs. Macro |
Micro: me, tim hortons, "I"
Macro: Everyone else, restraunt industry, "We" |
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Production Possibility Curve (PPC) |
shows maximum combination of output using the best available technology |
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Scarcity vs. Choice |
Scarcity: any points outside PPC
Choice: any points inside or on the PPC |
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Law of Constant Cost |
the cost incured for getting additional benefit/never changes |
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3 types of economies |
1.) Capitalist/Free Market - relies on demand and supply 2.) Socialist/command - relies on government 3.) Mixed Economy - mix of capitalist and socialist. "Canada/USA" |
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change in demand vs. change in quantity |
demand: - other things are responsible, price of product is NOT responsible for the change in demand.
quantity: - price of commodity/product, points on demand curve , downward movement along demand curve |
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Law of Demand |
higher the price of a product, the lower the quantity demanded vice versa, ceteris paribus |
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Determination of Equilibrium Price |
When Quantity Demanded equals Quantity Supplied. No excess demand or excess supply |
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Determination of excess demand at price level |
excess demand: rely on consumers to raise the price, DEMAND IS UNDERNEATH PRICE CEILING |
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Determinants of Demand |
- taxes, age, taste, level of education, consumers income |
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3 fundamental economic questions |
1. WHAT to Produce 2. HOW to Produce 3. For WHOM |
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2 types of statements |
POSITIVE - can be verified, it can be true or false "IS/WAS" ex. derek jeter plays for the yankees
NORMATIVE - based of personal belief, emotion, judgement. "should/ought/the best/worst" |
