Adobe Ch. 1 Flashcards Preview

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Flashcards in Adobe Ch. 1 Deck (36):
1

why is the slope negative on a budget line

consumers have limited incomes

2

why is the slope negative on a budget line

consumers have limited incomes

3

what does the slope reciprocal on the budget line tell us

the opportunity cost of one more unit of vertical good

4

opportunity cost

value of best alternative forgone due to taking the action; amount you give up to get the other

5

three key features of economic perspectives

scarcity and choices, purposeful behavior, marginal analysis

6

economists assume human behavior reflects what?

rational self interest

7

what do we want? marginal cost _ marginal benefit

less than

8

what do we want? marginal cost _ marginal benefit

less than

9

what does the slope reciprocal on the budget line tell us

the opportunity cost of one more unit of vertical good

10

opportunity cost

value of best alternative forgone due to taking the action; amount you give up to get the other

11

three key features of economic perspectives

scarcity and choices, purposeful behavior, marginal analysis

12

economists assume human behavior reflects what?

rational self interest

13

what is marginal analysis

everytime we make a rational choice, we weigh marginal benefit and cost of doing so

14

capital is

human made resources like machines lmao

15

ceteris paribus assumption

holding all other variables constant

16

microeconomics

decision making of individual

17

macroeconomics

economy as a whole

18

shift

change in price of both goods

19

pivot

change in price of one good

20

four categories of resources (aka FACTORS OF PRODUCTION)

land, labor, capital, entreprenuual activity

21

capital is

human made resources like machines lmao

22

efficient economy on ppc

producing anywhere on the ppc $ exhausted

23

inefficient economy on ppc

points inside ppc, $ left over

24

what does the slope of ppc tell us

amount of vertical good the economy must give up to make 1 more unit of horizontal good- the oc of producing one more unit of horizontal good

25

law of increasing OC

economy produces more and more of 1, must give up larger and larger amounts of other

26

why is the law of increasing OC curved

OC aren't constant; driven by fact economic resources aren't completely adaptable to alternative use aka the low hanging fruit principle

27

optimal amount of activity

mb = mc

28

mb greater than mc equals

exapnd activity

29

mc is greater than mb equals

reduce activity

30

mc curve slopes up because

more product equals more cost

31

unemployement is where on / in the ppc

inside the ppc

32

economic growth occurs when

there are more resources, there is improvement in quality of exisiting resources and advances in technology that enable people to use exisitng resources efficiently

33

marginal decision compares what

two of the same thing

34

normantive statement

subjective, opinion, judgement

35

positive statement

objective, evidence, fact

36

trade off

alternative choice