Resources
Mrs. Jackson teaching
Labor
The second best choice you gave up when you chose the first best choice.
Opportunity Cost
When one country is better at making a product than another.
Absolute Advantage.
Consumers want to buy as much as they can for as little money as possible (inverse relationship)
Law of Demand
Cattle gets cheaper. The supply of steak...
Increases (shift right)...
Tractor on Farm
Capital
When an economy operates inside the PPC/PPF.
Inefficiency or Underemployment
The ability of an economy to produce a good at a lower opportunity cost than another country.
Comparative Advantage.
Producers want to produce as much as they can and sell it for as much money as they can (direct relationship)
Law of Supply
Lebron James releases a new shoe. After winning the NBA Finals the demand for the shoe...
Increases (Shifts Right)
Phil Knight (Creator of Nike)
Entrepreneurship
Any point outside the PPC/PPF
Unattainable
As price goes up, so does quantity.
Supply
Supply shifts left and Demand shifts right.
Price Increases
Learning how to bake a fluffier croissant
Human Capital
This means that the more you have of something, the less utility [satisfaction] you get from each new unit.
Diminishing Marginal Utility
United States: 100 cars 200 tomatoes
France: 90 cars 100 tomatoes
Comparative Advantage for Cars
France
Quantity Supplied is at 300 units. Quantity Demanded is at 200 Units.
What exists?
Surplus
Demand Shifts Left and Supply Shifts Left
Price remains the same.
The Rainforest
Land
As production of a product increases, the cost to produce an additional unit of that product increases as well.
The Law of Increasing Opportunity Costs
Using the same amount of time and resources, Tomer can either write 100 lines of code or process 20 reports, and Charlotte can either write 120 lines of code or process 20 reports.
Which of these terms of trade will Charlotte and Tomer agree on if they specialize and trade?
1 line of code = 0.18 of a report
The point where quantity supplied and quantity demanded meet.
Equilibrium Quantity
An increase in the demand for bread following a very harsh winter changes the price of bread...
The price of bread increases.