Economics test 1

Scarcity

• No unlimited resources
• whatever must be given up to obtain something.
• Price x Quantity depends on elasticity
• total surplus maximized

opportunity costs

• whatever must be given up to obtain something.
• No unlimited resources
• Price x Quantity depends on elasticity
• total surplus maximized

Absolute Advantage

• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• Ability to produce on item at a lower opportunity cost. * key to specialization +trade*
• whatever must be given up to obtain something.
• No unlimited resources

Comparative Advantage

• Ability to produce on item at a lower opportunity cost. * key to specialization +trade*
• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• sum of all individual demand curves. made from all our answers combined
• whatever must be given up to obtain something.

Production possibilities frontiers

• Combinations of outputs on economy can produce given the resources and technology
• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• sum of all individual demand curves. made from all our answers combined
• whatever must be given up to obtain something.

Law of demand

• All else equal, Q decrease when P decrease. Quantity responses to price.
• whatever must be given up to obtain something.
• sum of all individual demand curves. made from all our answers combined
• No unlimited resources

Market Demand

• sum of all individual demand curves. made from all our answers combined
• All else equal, Q decrease when P decrease. Quantity responses to price.
• No unlimited resources
• whatever must be given up to obtain something.

Competitive Market

• Many buyers and many sellers, where each has a negatable impact on price.
• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• sum of all individual demand curves. made from all our answers combined
• All else equal, Q decrease when P decrease. Quantity responses to price.

Law of supply

• All else equal, if price increases than so does quantity. Posititive relationship
• Lots of buyers/Goods are identical/Nothings else changes(constant)
• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• Many buyers and many sellers, where each has a negatable impact on price.

Perfect Comp

• Lots of buyers/Goods are identical/Nothings else changes(constant)
• Ability to produce a good using fewer input than other producers.*Best producer of goods*
• All else equal, if price increases than so does quantity. Posititive relationship
• Many buyers and many sellers, where each has a negatable impact on price.