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30 Cards in this Set
- Front
- Back
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economic is the study of
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how people use limited resources to try to satisfy unlimited wants
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capital may be defined as
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human creations in the production process
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define service
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an intangible activity
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who plays the largest role in the 4 types of decision makers
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US households as buyers and sellers in the resource market
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define macroeconomics
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the study of the behavior of the economy as a whole
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define marginal
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one unit change; incremental or decremental
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what is a normative statement
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this is the way things normally should be
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what is one pitfall to rent control
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politicians do not consider the secondary effects
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opportunity cost
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the value of the best alternative not selected
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comparative advantage states
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a person should produce a good if he or she has the lowest opportunity cost
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define absolute advantage
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to be able to a good with the fewest resources
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what is barter?
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exchange or swap one good for another
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what is an advantage to using division of labor?
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allows tasks to be performed more efficiently
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describe the shape of a PPF curve
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concave to the point of origin (bows out)
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one way to shift the PPF curve outward
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more efficient use of existing technology or resources
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what type of economic system is used in America?
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a mixed capitalist country
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what is the law of demand?
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price and quantity demanded are inversely related
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a rightward shift in the demand curve signifies what
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an increase in overall demand
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what is an economic substitute?
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if the price of one item increases, the competitive item demand will increase
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describe substitute on a demand curve
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ex. if the price of butter rises, the demand for its alternative (margarine) shifts right
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an example of an economic complement
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if the price falls for jelly, demand for both jelly and peanut butter will rise
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give one possible explanation of a change leading to an increase supply of school textbooks
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new production technologies available
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when does a product surplus occur?
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when supply is greater than demand
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what is one factor that can lead to a decrease in equilibrium price?
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decreased demand
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two immediate secondary effects from an increase in product demand are...
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increased production and higher prices
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what is economic utility?
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a measure of the relative satisfaction from, or desirability of, consumption of various goods and services
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name one advantage when choosing a partnership as your business model
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easy to start
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what is fiscal policy?
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taxing and spending by the government
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describe a progressive tax
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as income rises, rates of taxation on said income rises
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what are tariffs?
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taxes imposed on imported goods
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