There is exists limited resources in our world but we have unlimited wants. Therefore, we face?
Scarcity
What are the factors of production?
Land, Labor, Capital, Entrep.
What gives the demand curve its shape?
The law of demand.
What gives the supply curve its shape?
The law of supply.
Where is market equilibrium found?
Where demand and supply cross.
Opportunity Costs can best be described as?
Your second best choice.
Which economic systems is based on private ownership?
If the price of donuts increases what happens to the demand for donuts?
The quantity demanded decreases. (movement)
What would cause an increase in the quantity supplied of boxed water?
An increase in the price.
If the equilibrium price for popcorn is $4. What would happen at a price of $6?
A surplus
If Ms. B has a few free hours on Saturday she prefers to go on a hike. If she cannot go on a hike she prefers to head to the beach. If she cannot do either she prefers to go on a bike ride. What is her opportunity cost of hiking?
Going to the beach.
What does a point inside the PPC represent?
inefficient production
TRIBE stands for?
tastes & preferences, related goods, income, number of buyers, expectations.
TIEN stands for?
Technology, inputs, expectations, number of sellers.
Assume that the market for gas is in equilibrium. If both the supply of and the demand for bottled water decrease, what will be the effect on equilibrium price and quantity?
Quantity decrease, price indeterminate
Why will we all eventually stop eating pizza?
The law of diminishing marginal return
If they have the lower comparative advantage
If people demand more honey when the price of tea falls, then honey and tea are?
Complements
Give an example of something that would shift the supply curve of cereal to the left.
Decrease in tech used to produced (T), increase in wheat (I), increase in suppliers expectations that price will increase (e), decrease in the number of producers (N).
In order for a price floor to be binding it must be?
Above equilibrium price
If the local CA gov't can only choose one project, which one should they choose: widening a highway total costs $100 million & total benefits $80 million; building a new highway total cost $100 mil & total benefits $90 mil; building a new bridge total cost $100 mil & total benefits $140 mil; building a new tunnel total costs $100 mil & total benefits $115 mil.
Building a new bridge.
If nation A can produce 1 apple by giving up 1/2 of an orange & nation B can produce 1 apply by giving 1/4 of an orange. Who should specialize in the production of apples?
Nation B
If consumers expect the price of almond joys to decrease in four weeks what happens to the demand curve?
Demand decreases / shift left.
Assume you are the supplier of houses. What should you do with your supply if the price of lumber increases?
Decrease your supply (inputs)
Assume the market for apartments is in equilibrium. What would happen if the local gov't steps in with a price ceiling?
A persistent shortage would occur.