Comparatively Speaking
Circular Flowness
The Possibilities are endless
Supply and Demand
Economic Systems, Yo
100
How per unit opportunity cost is calculated?
What is opportunity cost/units gained? (what is given up over what is gained)
100
Part of the economy that is run by individuals and businesses
What is the private sector?
100
This model graphically demonstrates scarcity, trade-offs, opportunity costs, and efficiency.
What is the PPF/PPC?
100
If the price goes up for a product, consumer buy less of that product and more of another substitute product (and vice versa)
What is the substitution effect?
100
The three economic questions all economies must answer.
What is What goods and services should be produced? How should these goods and services be produced? Who consumes these goods and services?
200
Ronald McDonald can produce 20 pizzas or 200 burgers Papa John can produce 100 pizzas or 200 burgers This is Ron's per unit opportunity cost for producing pizzas.
What is 10 burgers?
200
Payment for the factors of production, namely rent, wages, interest, and profit
What are factor payments?
200
The four assumptions that must be made to create the PPF.
What is Only two goods can be produced Full employment of resources Fixed Resources (Ceteris Paribus) Fixed Technology
200
The law of diminishing marginal utility states this.
What is Utility = Satisfaction We buy goods because we get utility from them The law of diminishing marginal utility states that as you consume anything, the additional satisfaction that you will receive will eventually start to decrease In other words, the more you buy of ANY GOOD the less satisfaction you get from each new unit consumed.
200
Individuals OWN resources and answer the three economic questions. The opportunity to make PROFIT gives people INCENTIVE to produce quality items efficiently.
What is free market system?
300
Americans produce 50 computers or 50 TVs per hour. Chinese produce 30 computers or 40 TVs per hour. The preceding is this type of problem and this person has the comparative advantage in TVs.
What is output and China. (1 TV=3/4C)
300
When the government redistributes income (ex: welfare, social security)
What is transfer payments?
300
The situations that lead to an increase in the PPF/PPC.
1. Change in resource quantity or quality 2. Change in Technology 3. Change in Trade
300
If the price of a good INCREASES, where will demand shift?
What is IT WON'T! Price is already accounted for on the graph.
300
These types of economies face problems of poor-quality goods, shortages, and unhappy citizens
What is centrally planned/command economies/communism?
400
Americans produce 100 computers or 50 TVs per hour. Chinese produce 30 computers or 40 TVs per hour. In order to be beneficial, these would be the terms of trade for China and USA in terms of computers.
For one TV, the US would give up 2 computers or less. China would trade for at least 3/4 of a computer. 3/4C<1TV<2C
400
Households are ________ in the product market and _________ in the resource market.
What is consumers and suppliers?
400
The reason the law of increasing opportunity cost exists.
What is Resources are NOT easily adaptable to producing both goods.
400
The determinants of demand and supply.
What is S: Prices/Availability of inputs (resources) Number of Sellers Technology Government Action: Taxes & Subsidies Future Expectations of profit D: Tastes and Preferences Number of Consumers Price of Related Goods Income Future Expectations
400
The concept that society’s goals will be met as individuals seek their own self-interest.
What is the invisible hand?
500
Justin fixes 4 flats or 8 brakes per day. Tim fixes 1 flats or 5 brakes per day. The preceding is this type of problem and this person has the comparative advantage brakes.
What is Tim 1B=1/5 flat
500
The “place” where resources (land, labor, capital, and entrepreneurship) are sold to businesses.
What is the resource market?
500
The difference between allocatively and productively efficient.
What is Productive Efficiency- Products are being produced in the least costly way. This is any point ON the Production Possibilities Curve Allocative Efficiency- The products being produced are the ones most desired by society.This optimal point on the PPC depends on the desires of society.
500
A good that has many substitutes, is a luxury, the consumer can take time to decide and might be expensive.
What is a good with elastic demand?
500
Countries with free markets, property rights, and The Rule of Law, have historically seen greater economic growth because they are more _________
What is productive?
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