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21 Cards in this Set

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