Scarcity
"is supposed to be" shows the statement is a normative or positive?
Normative statement
For your time between 12:00--13:00 today, you have three choices, nap, video game and lunch. If you choose to play video game, how to decide which one is your opportunity cost?
What's the assumption to form demand curve and supply curve?
Ceteris Paribus
Define producer surplus
The difference between the cost of production and the market price.
What's the difference between PED and the slope of the demand curve?
PED shows the percentage in changes
Slope is the ratio of the changes.Crude oil is used for producing fabric for clothes, and for gasoline for cars. Justify which is needs,which one is wants
Clothes is needs, since it refers to human survival.
Gasoline is wants.
Use PPC to define opportunity cost?
The resources are limited.
More of product A is produced while product B is sacrificed.
How to construct a market demand curve from different individual demand curves?
Added them up horizontally
When demand increases, disequilibrium occurs. What is it?
Shortage.
If PED<1, when the price decreases, what happens to total revenue?
Total revenue decreases.
How to differentiate the public sector and private sector in a mixed economy?
Public sector is owned by the government.
Private sector is owned by individuals.
Describe the graph to show "improve in efficiency"
The points are in side the curve, but the point is moving toward to PPC.
Income is the asset or earning coming in for a period of time.
Wealth is accumulated assets.
What are three functions of price mechanism?
Signaling, incentive, rationing
"How to produce" means the way of production, and the allocation of different factors.
For example, industry that uses more labor is called labor-intensive.What happens to an economy's PPC in the future when it increases capital goods?
PPC shifts outward.
Quantity of capital increasesHow does expectation of future price change the behaviors of consumers and producers?
Consumers buy now.
Producers hold the sale.
Explain " rationing" from price mechanism in producer's angle
Price attracts more factors to the producers with higher profits.
Please define income elasticity of demand
the responsiveness of quantity demanded to the income change
Define Entrepreneur and give an example
An example is a firm or an owner of a food truck.
The most two important assumptions to explain "increasing opportunity cost" is?
The productivity changes between different factors to two different goods.
The factors better at producing A will be transferred to producing B at last.Competitive supply is one material that can be used for different production. They compete for the resources. one occupies more, while another is left less.
Joint supply is two materials that come from the same source. One is produced more while the other can be also obtained easily.
When supply increases, what happens to consumer surplus and producer surplus?
Consumer surplus increases.
Producer surplus depends on PED.
How do you describe Engel curve?
When income is at higher level, YED is less than 0.
When income is at lower level, YED is positive.