Determinants
The quantity demanded of this type of good increases as income decreases.
Inferior Good
Perfectly competitive industries should shut down when this condition is true.
When profit is less than average total cost
A point within the PPF represents this.
Inefficient use of resources
This is the law that explains the downward slope of a demand curve.
The Law of Diminishing Marginal Utility
This flows from households to businesses through the factor market.
Factors of Production
This government action serves to decrease input costs and shifts supply to the right.
Subsidies
The demand curve for perfectly competitive industries is equal to these.
MR. DARP - Marginal Revenue, Average Revenue, and Price
A country has a comparative advantage in the production of a good if this is true.
A Lower Opportunity Cost
This law explains the reason for an upward sloping supply curve.
Law of Increasing Costs
This is the problem faced by society's unlimited wants.
Scarcity
Determinants of demand include what?
Related Goods Prices, Income, Expectations, Number of Buyers, and Consumer Preferences
Because monopolists produce at P > MC, it is not what?
Allocatively Efficient
A situation where the number of hours needed to produce a given amount of quantities us this type of situation.
An Input Situation
If iPhones suddenly become cheaper relative to Samsung phones, then people buy more iPhones. This effect represents what?
Substitution Effect
Pablo can either study, mow the lawn for $10, or paint the fence for $5. The opportunity cost of him studying is...
Determinants of supply include what?
The number of sellers, input prices, government actions, and producer expectations.
A monopolistically competitive firm make this of profit in the long term.
Normal Profit
Outward shifts of the PPF can be caused by these.
Improvements in technology and increases in productivity
This situation is caused by a price ceiling, where quantity demanded exceeds quantity supplied.
A Shortage
Factors of production consist of what?
Land, Labor, Capital, and Entrepreneurship
The Law of Supply states that given this, quantity supplied increases as price increases.
All other things equal
Relationships between oligopolists firms are characterized by this principle.
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 which country?
Both countries
This is the difference between the price a consumer is willing to pay and the actual price paid.
Consumer Surplus
Trade-Offs