Resources/Factors of Production
Any effort a person devotes to a task for which that person is paid. (Ex: manual laborers, lawyers, doctors, teachers, waiters, etc.)
What is Labor?
The next best alternative you gave up when you chose the first best choice.
What is Opportunity Cost
When one country is better at making a product than another.
What is Absolute Advantage.
Consumers want to buy as much as they can for as little money as possible.
What is the Law of Demand
Cattle gets cheaper. The supply of steak...
What is Increases (shift right)...
Any human-made resource that is used to create other goods and services. ( Ex: tools, tractors, machinery, buildings, factories, etc.)
What is (physical) Capital?
The ability of an economy to produce a good at a lower opportunity cost than another country.
What is Comparative Advantage.
Producers want to produce as much as they can and sell it for as much money as they can.
What is the Law of Supply
NBA star Kawhi Leonard releases a new shoe after returning to the Clippers lineup following a "torn" ACL...the demand for New Balances...
What is Increases (Shifts Right)
Ambitious leaders that combine the other factors of production to create goods and services.
Examples-Henry Ford, Bill Gates, Inventors, Store Owners, etc.
What is Entrepreneurship?
Any point outside the PPC/PPF
What is Unattainable.
United States: 500 bushels of corn Mexico: 400 bushels of corn Absolute Advantage.
What is the United States?
As price goes up, so does quantity.
What is Supply?
Supply shifts left and Demand shifts right.
What is Price Increases and Quantity is indeterminate
Any skills or knowledge gained by a worker through education and experience.
What is Human Capital?
Term to describe a PPC when resources are easily adaptable between both products.
What is a constant opportunity cost?
United States: 100 cars 200 tomatoes France: 50 cars 300 tomatoes. Comparative Advantage for tomatoes.
What is France?
Quantity Supplied is at 300 units. Quantity Demanded is at 200 Units.
What is Surplus.
Demand Shifts Left and Supply Shifts Left
What is Price is indeterminate and Quantity decreases?
All natural resources that are used to produce goods and services. (Ex: water, sun, plants, animals)
What is Land?
Term to describe a PPC when resources are not easily adaptable between both products.
What is The Law of Increasing Opportunity Costs?
Acceptable Terms of Trade for Cars/Tomatoes. United States: 100 cars 200 tomatoes France: 50 cars 300 tomatoes Comparative Advantage for Cars
What is 1 car for 4 tomatoes?
The point where quantity supplied and quantity demanded meet.
What is the Equilibrium?
The government sets a binding "this" above the equilibrium price resulting in a quantity surplus.
What is a binding price floor?