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  1. Scarcity
    a situation where everyone cant get all they want of something
  2. Economics
    The study of how people do the best they can, or cope, in a world of scarcity
  3. Marginal Costs
    Incremental cost, the cost of a little bit more
  4. Marginal Benefit
    Incramental benefit, the benefit of a little bit more
  5. Market
    A place that brings buyers and sellers together
  6. "Invisible Hand"
    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
  7. Demand
    The relationship between price and quantity demand
  8. Substitutes
    • 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
  9. Complements
    • Goods that are used together. When the price of one falls, the demand for the other product increases.
    • Video games and Xboxs are complements
  10. Supply
    The relationship between price and quantity supply
  11. Positive vs. Normative
    • Positive- "what is"
    • Normative- "what should be"
  12. If sellers expectations of future prices goes up, what shifts?
    Supply goes down
  13. If the number of sellers goes up, what shifts?
    Supply goes up
  14. Gross Domestic Product (GDP)
    The dollar value of new domestically produced, final goods/services over a period of time, such as a year
  15. Unemployed
    • Labor Force
    • Not working
    • Available for/looking for work
  16. Unemployment Rate
    Unemployed people/Labor force
  17. Inflation
    A general rise in prices over time
  18. Sticky Prices
    Product prices that remain in place (atleast for a while) even though supply or demand has changed
  19. Basic determinants of demand
    • Consumers tastes' (preferences)
    • Number of buyers in the market
    • Consumers' incomes
    • Prices of related goods
    • Consumer expectation
  20. Basic determinants of supply
    • Resource prices
    • Technology
    • Taxes and subsidies
    • Prices of other goods
    • Producer expectations
    • Number of sellers in the market
  21. Opportunity Costs
    To obtain one more thing, society forgoes the opportunity of getting the next best thing. That sacrifice is opportunity cost
  22. Command System
    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
  23. Market System
    Economy in which the the private decisions of consumers, resource suppliers, and firms determine how resources are allocated
  24. Equilibrium Price
    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
  25. Surplus
    The amount by which the quantity supplied of a product exceeds the quantity demanded at a specific price
  26. Shortage
    The amount by which the quantity demanded of a product exceeds the quantity supplied at a particular price
  27. 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
  28. Sellers Expectation shift what?
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Test 1
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