Fundamentals
This flows from households to businesses through the factor market.
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?
This law is the rationale behind the upsloping supply curve.
What is the Law of Increasing Costs?
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?
Because a monopolist produces at P > MC, it is not this.
What is allocatively efficient?
A situation where the number of hours needed to produce a given amount of quantities is this type of situation.
What is an input situation?
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, input prices, number of sellers, and this.
What is weather?
A monopolistically competitive firm makes this type of profit in the long run.
What is normal?
Given society's unlimited wants and limited resources, society must make these.
What are trade offs?
This is the difference between the price a consumer is willing to pay and the price actually paid.
What is consumer surplus?
Relationships between oligopolist firms are characterized by this principle.
What is mutual interdependence?