Ch 1-3

Question 1

What is economics?

Answer 1

The study of scarce resources and unlimited wants

Question 2

What is opportunity cost?

Answer 2

The value of what you give up to do something else

Question 3

3 economic ?’s

Answer 3

what to produce?
how to produce?
for whom to produce?

Question 4

Factors of production (resources)

Answer 4

land, labor, capital, entrepreneurship

Question 5

Positive economic statement

Answer 5

what is, fact

Question 6

Normative economic statement`

Answer 6

what should be, opinion

Question 7

Ceteris paribus (CP)

Answer 7

other things being equal, nothing else changes

Question 8

Production possibilities curve (PPC)

Answer 8

alternative combinations of goods and services that could be produced in a given time period with all available tech + resources

Question 9

Increase in PPC (curve shift to right)

Answer 9

increase in resources/tech

Question 10

A point on the PPC curve?

Answer 10

efficient

Question 11

A point inside the PPC curve?

Answer 11

inefficient

Question 12

A point outside the PPC curve?

Answer 12

unattainable

Question 13

Economic growth

Answer 13

increase in output (real GDP)

Question 14

GDP

Answer 14

gross domestic product, total market value of all final goods + services produced in 1yr

Question 15

Per capita

Answer 15

per person

Question 16

Productivity

Answer 16

output per unit of input

Question 17

Role of government

Answer 17

legal framework, protect environment, protect consumers + workers

Question 18

What is demand?

Answer 18

shows the quantity of a good that will be purchased by consumers at various prices, CP

Question 19

Law of demand

Answer 19

increase in price leads to a decrease in quantity demand, cp

Question 20

Law of demand (inverse)

Answer 20

decrease in price leads to an increase in quantity demand, cp

Question 21

Demand curve

Answer 21

slopes down

Question 22

Individual demand

Answer 22

one person

Question 23

Market demand

Answer 23

sum of all demand

Question 24

Demand on a graph

Answer 24

whole curve

Question 25

Quantity demand on a graph

Answer 25

point on curve

Question 26

when price changes (demand)

Answer 26

quantity demand changes (movement)

Question 27

when "other things" change (demand)

Answer 27

demand changes (shift)

Question 28

decrease of demand on a graph

Answer 28

left on a graph

Question 29

increase of demand

Answer 29

right on a graph

Question 30

"other things" that change demand

Answer 30

taste/desire, income, other goods, expectations, # of buyers

Question 31

Complementary goods (go together)

Answer 31

if price of X increases then quantity demand of X decreases and the demand of Y decreases

Question 32

Substitutes (either/or)

Answer 32

if the price of X increases then quantity demand of X decreases and the demand of Y increases

Question 33

What is supply?

Answer 33

shows quantity of a good that will be produced by sellers at different prices, CP

Question 34

Law of supply

Answer 34

increase in price leads to increase in quantity supply, cp

Question 35

Law of supply (inverse)

Answer 35

decrease in price leads to decrease in quantity supply, cp

Question 36

supply curve

Answer 36

slopes up

Question 37

individual supply

Answer 37

one person

Question 38

market supply

Answer 38

sum of all supply

Question 39

supply on a graph

Answer 39

whole curve

Question 40

quantity supply on a graph

Answer 40

point on curve

Question 41

when price changes (supply)

Answer 41

quantity supply changes (movement)

Question 42

when "other things" change (supply)

Answer 42

supply changes (shift)

Question 43

increase in supply

Answer 43

right on a graph

Question 44

decrease in supply

Answer 44

left on a graph

Question 45

"other things" that change supply

Answer 45

tech, factor costs, other goods, taxes/subsidies, expectations, # of sellers

Question 46

Equilibrium

Answer 46

point of balance (market)

Question 47

At equilibrium on a graph

Answer 47

Quantity demand equals quantity supply

Question 48

surplus

Answer 48

excess quantity supply, too high

Question 49

shortage

Answer 49

excess quantity demand, too low

Question 50

increase in demand as it relates to Equil?

Answer 50

increase in equil price and increase in equil quantity

Question 51

decrease in demand as it relates to Equil?

Answer 51

decrease in equil price and decrease in equil quantity

Question 52

increase in supply as it relates to Equil?

Answer 52

decrease in equil price and increase in equil quantity

Question 53

decrease in supply as it relates to Equil?

Answer 53

increase in equil price and decrease in equil quantity

Question 54

price floor

Answer 54

minimum price for good, must be above equilibrium

Question 55

price ceiling

Answer 55

max price for good, must be below equilibrium

Question 56

in economics...

Answer 56

ceilings are below floors