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28 Cards in this Set

  • Front
  • Back
Law of demand
more will be demanded at lower prices and less at high price
Law of Supply
more will be offered at high price and lower at a low price
Price effect
movement up and down the curve
Shift/Change in demand/supply
movement of the curve
Factors that cause a change in demand
Price, tastes, income, substitutes, compliments
Factors that change supply
Technology, Cost of inputs and productivity
Define elasticity/ in elasticity of demand
In elasticity: Gas Prices

Elasticity: cookies
Cost benefit analysis
way of thinking that compares the cost of an action to its benefits
Difference between a command economy and a market economy.
Command: a set of officials make the decisions for the whole economy
Market: the economy (demand/supply and price system) help the people make the decisions
Opportunity Cost:
Cost of the next best alternative use of money, time and resources.
Scarce resources and virtually unlimited wants
Comparative advantage:
Countries ability to produce a given product relatively more efficiently than another country. (they have a lower opportunity cost aka, cheaper to produce.)
a purpose or meaning to get something accomplished
Price are determined by?
The consumers and suppliers (producers) together determine the price
Risk taking individual in search of profits (on of the four factors of productions.)
Pillars of free enterprise (4 pillars):
Private property: Fundamental feature of capitalism which allows individuals to own and control their possessions as they wish, includes both tangible and intangible property.
PRICE SYSTEM: using money to send signals to buyers and sellers
MARKET COMPETITION: provides better products
Competing products that can be used in place of one another. If price increases on one demand will go up on the other
products that increase the value of other products. Price increases, demand will go down for both.
Sending American jobs overseas to other companies for a lower opportunity cost.
Market structure characterized by a single producer. (form of imperfect competition.)
Sames as monopoly but there are numerous producers controlling the economy
quantity supplied is greater than quantity demanded
Quantity supplied is less that quantity demanded at a given price
What do governments create to stop shortages and surpluses
Price floors and ceilings
Fiscal Policy:
Use of government spending and revenue collection measure to influence the economy.
Monetary Policy:
Mechanism that keeps a money supply durable portable divisible and in a stable value, gold standard, silver standard, and fiat money standard.
Rise in the general level of prices (to much money chasing to few goods)
Tax placed on an imported product.