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a situation where everyone cant get all they want of something
The study of how people do the best they can, or cope, in a world of scarcity
Incremental cost, the cost of a little bit more
Incramental benefit, the benefit of a little bit more
A place that brings buyers and sellers together
The tendency of firms and resource suppliers that seek to further their own self-interests in competitive markets to also promote the interests of society
The relationship between price and quantity demand
- Goods that can be used in place of each other. When the price of one falls, the demand for the other product falls vice versa.
- Coke and Pepsi are substitutes
- Goods that are used together. When the price of one falls, the demand for the other product increases.
- Video games and Xboxs are complements
The relationship between price and quantity supply
Positive vs. Normative
- Positive- "what is"
- Normative- "what should be"
If sellers expectations of future prices goes up, what shifts?
Supply goes down
If the number of sellers goes up, what shifts?
Supply goes up
Gross Domestic Product (GDP)
The dollar value of new domestically produced, final goods/services over a period of time, such as a year
- Labor Force
- Not working
- Available for/looking for work
Unemployed people/Labor force
A general rise in prices over time
Product prices that remain in place (atleast for a while) even though supply or demand has changed
Basic determinants of demand
- Consumers tastes' (preferences)
- Number of buyers in the market
- Consumers' incomes
- Prices of related goods
- Consumer expectation
Basic determinants of supply
- Resource prices
- Taxes and subsidies
- Prices of other goods
- Producer expectations
- Number of sellers in the market
To obtain one more thing, society forgoes the opportunity of getting the next best thing. That sacrifice is opportunity cost
A method of organizing an economy in which property resources are plublicly owned and government uses central economic planning to direct and coordinate economic activities
Economy in which the the private decisions of consumers, resource suppliers, and firms determine how resources are allocated
The price at which the quantity demanded and the quantity supplied are equal, there is neither a shortage or a surplus, and there is no tendency for price to rise or fall
The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price
The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular price
Difference between real GDP and nominal GDP
- Real GDP- measures the value of final goods/services produced within the country's borders
- Nominal GDP- totals the dollar value of all goods/services produced
Sellers Expectation shift what?