Intro to Economics Flashcards
(14 cards)
Define Supply
The quantity of a good/service producers are willing and able to produce at a given time and price
What is the Law of Supply
As supply increase - price increases
As supply decrease - price decreases
List non price factors that impact supply
- cost of production
- productivity
- indirect tax
- technology
- weather
What is it called when you move along the curve of a demand/ supply graph
Contraction of demand/ supply
What is it called when you move down the curve of a demand/ supply graph
Extension of demand/ supply
Define Demand
The quantity of a good/service consumers are willing and able to buy at a given time and price
What is the Law of Demand
As price increase - demand decreases
As price decrease - demand increases
List non price factors that impact supply
Population
Advertising
Substitute’s price
Income
Fashion/ taste
Interest rates
Complement price
ARSI define
Allocate scarce resources
Ration excess demand/ supply
Signal that price is too high/low
Incentives to change price and increase profit
Define economics
The studied decision made b individuals, households, businesses, governments and other groups about how scarce resources are allocated in attempting to satisfy unlimited needs and want
what is a good and a service?
A good is a tangible item that satisfy needs and wants- they can be seen and touched
A service is an intangible activity that satisfies needs and wants- it does not result in ownership
Types of good
Economic goods (food, clothing, housing):
-An economic good is a product which has a price when sold.
-It has a benefit to society.
-They can be scarce
Free goods (air,sea,water):
-A free good is a good with zeroopportunity cost.
-This means it can be produced by society in as much quantities as needed with little or zero effort.
-They are abundant.
Luxury goods (luxury car, watches, wines etc.) :
-A luxury good is agoodfor which demand increases asincomerises.
-They can be scarce
Essential Goods (food, water, materials to build shelter, etc.)
- An essential good is essential for life.
- They can be scarce.
what is scarcity?
The economic problem of having unlimited needs and wants, but limited resources that can be used to achieve them.
What is opportunity cost?
The next best alternative given up when a choice is made.
For example, if I go to the tuckshop and have to choose between an apple and a banana and I chose the apple then the opportunity cost is the banana.
