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