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21 Cards in this Set
- Front
- Back
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scarcity
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when we have fewer resources than we wish. households and society face this problem
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oppurtunity cost
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is what u give up in order to get that item. This is the TRUE cost
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production possibility
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a graph that shows a combination of output the economy can possibly produce, given available factors of production and available production of technology
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absoulte advantage
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is the comparison among producers of a good according to their productivity. pg51
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comparitive advantage
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the comparison among producers of a good according to their opportunity cost.
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quantity demand
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the amount of a good buyers are willing and able to purchase. Negatively related to price
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trade restrictions
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protect domestic jobs
national security retaliation from unfair trade infant industry growth |
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substitutes in demand
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two goods for which an increase for one leads to an increase in another. price for yogart falls so price for ice cream falls because u buy less of it.
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complements
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two goods for which an increase in one leads to a decrease in another. hot fudge price drops, so you buy more ice cream.
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normal good
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when the demand for a good drops when income drops like ice cream
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inferior good
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when the demand for a good rises when income drops liek the bus
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things that shift demand curve
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income
prices of related good tastes expectations number of buyers |
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qunatity supplied
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the amount of a good that sellers are willing and able to sell
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law of supply
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the quantity supplied rises when the price of a good rises
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elasticity
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a measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants
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total revenue
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the amount paid by buyers and recieved by sellers of a good, computed as the price of the good times the quantity sold
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elasticity and total revenue
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drops
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inelasticity and total revenue
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increases
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price ceiling
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a legal maximum on the price at which a good can be sold
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price floor
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a legal minimum on the price at which a good can be sold
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taxes incidence
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the manner in which the burden of tax is shared among participants in a market
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