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28 Cards in this Set

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  • 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.
Scarcity
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.)
Incentive
a purpose or meaning to get something accomplished
Price are determined by?
The consumers and suppliers (producers) together determine the price
Entrepreneurship:
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
ENTREPRENEURSHIP
Substitutes:
Competing products that can be used in place of one another. If price increases on one demand will go up on the other
Complements:
products that increase the value of other products. Price increases, demand will go down for both.
Outsourcing:
Sending American jobs overseas to other companies for a lower opportunity cost.
Monopoly:
Market structure characterized by a single producer. (form of imperfect competition.)
Oligopoly:
Sames as monopoly but there are numerous producers controlling the economy
Surplus:
quantity supplied is greater than quantity demanded
Shortage
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.
Inflation:
Rise in the general level of prices (to much money chasing to few goods)
Tariff:
Tax placed on an imported product.