Fundamentals
Land, labor, and capital are three examples of these.
What are factors of production?
This is the law describing the rationale behind the down sloping demand curve.
What is the Law of Diminishing Marginal Utility?
The quantity demanded of this type of good increases as income decreases.
What is an inferior good?
Perfectly competitive industries should shut down when this condition is true.
What is P is less than AVC?
A point within the PPF represents this.
What is inefficient use of resources?
This is the problem faced by society's unlimited wants.
What is scarcity?
A direct relationship between price and quantity supplied is stated as this.
What is the Law of Supply?
This government action serves to decrease input costs and shifts supply right.
What are subsidies?
The demand curve for perfectly competitive industries is equal to these.
What is MR, AR, P?
A country has a comparative advantage in the production of a good if this is true.
What is having a lower opportunity cost?
Pablo can either study, mow the lawn for $10, or paint the fence for $5. The opportunity cost of him studying is this.
What is $10?
If iPhones suddenly become cheaper relative to Samsung phones, then people buy more iPhones. This effect represents the given situation.
What is the substitution effect?
Determinants of demand include related goods prices, income, expectations, number of buyers, and this.
What is consumer tastes and preferences?
Because a monopolist produces at P > MC, it is not this.
What is allocatively efficient?
A excise tax is this type of tax, not a lump sum!
What is per unit tax?
Factors of production include, land, labor, capital, and this.
What is entreprenurial ability?
This situation is caused by a price ceiling, where quantity demanded exceeds quantity supplied.
What is a shortage?
Determinants of supply include government actions, technology, producer expectations, number of sellers, and this.
What are input prices.
A monopolistically competitive firm makes this type of profit in the long run.
What is normal?
Outward shifts of the PPF can be caused by three factors: Changes in resource quantity or quality, a change in trade, or this.
What is a change in technology?
Given society's unlimited wants and limited resources, society must make these.
What are trade offs or choices?
This is the difference between the price a consumer is willing to pay and the price actually paid.
What is consumer surplus?
The Law of Demand states that given this, quantity demanded increases as price decreases.
What is all other things equal or ceteris paribus?
Relationships between oligopolist firms are characterized by this principle.
What is mutual interdependence?
If Japan can produce 5 computers in an hour and the US can produce 10 computers in 2 hours, the absolute advantage belongs to this party.
What is both countries?