How Economists Think
The fundamental economic problem resulting from infinite human wants and finite resources is?
Scarcity
What factor causes a movement along a demand or supply curve rather than a shift of the curve?
Change in Price
At a price above equilibrium, what exists in the market?
Excess supply (a surplus).
The law the explains why the Demand curve slopes downward is called?
The Law of Diminishing Marginal Utility
Fascism would typically be found in which quadrant of the political compass?
Upper Right
What are four main categories of resources used to produce goods and services?
CELL
Capital, Entrepreneurship, Land, Labour
The direction the market supply curve shifts when a government provides a financial grant (subsidy) to producers
Right / Outward
In a market priced below equilibrium, what incentive pushes producers to supply more as the price rises?
Higher profit.
The behavioral economics concept where consumers or producers pick an option that is "good enough" rather than calculating maximum utility
Satisficing
WAEMU is a ______________?
Trade Bloc
Economic statements/claims that are based on empirical evidence, facts, and logic that can be tested or proven are known as?
Positive Economic Statements/Claims
Production of two goods from one source is known as?
Joint Supply
What condition at competitive equilibrium makes the market allocatively efficient?
MB = MC
MB = Price
Social Surplus Maximized
The other name for the market curve representing Marginal Cost (MC) for firms in the short run.
Supply Curve
Brazil’s coffee industry and the US’s electronics industries illustrate which trade concept?
Comparative Advantage
In the circular flow of income model, the three leakages from the flow are?
Taxes
Savings
Imports (Import Expendicure)
Netflix raises the cost of their subscription plans by 50%. What is the expected impact on the price for movie theater popcorn?
The price increases.
Demand for theater visits shifts right, popcorn demand shifts right as a complement, popcorn’s equilibrium price rises.
After a poor harvest, the price of coffee rises and many consumers switch to tea. What role is the higher price playing in this market?
Rationing (Function)
The cognitive bias where consumers rely too heavily on the initial piece of information or price offered.
Anchoring Bias
What are the 4 main agents of ‘political socialization’?
Family, Education, Media, Peer Groups
What is the primary reason why a PPC curve is typically drawn bowed outward (concave) rather than as a straight line?
Increasing Opportunity Costs
(or non-homogenous factors of production)
What structural factor constraint explains why the Law of Diminishing Marginal Returns operates in the short run, but cannot operate in the long run?
Fixed factors of production (Fixed inputs)
Why would producing one more unit beyond the equilibrium quantity reduce total community surplus?
Because the marginal cost of that unit is greater than its marginal benefit.
MC > MB
If a firm is not choosing to maximize profit, it means that they are not operating at the quantity where ___________________________?
MC = MR
A strong research question is clear, focused, concise, _________ and ___________.
complex, debatable/open