Economic Foundations
This core idea explains why individuals and societies cannot have everything they want.
Scarcity
This economic system relies on customs and bartering to decide what to produce.
Traditional Economy
When the price of a good rises, quantity demanded falls. This is known as…
Law of Demand
A price ceiling set below equilibrium will create this.
Shortage
The area below the demand curve and above price represents this.
Consumer surplus
The next best option that is given up when making a decision
Opportunity Cost
In the circular flow model, these economic actors provide labor to firms.
households
A product whose demand decreases when income falls is what type of good?
Normal good
A minimum legal price set by the government is known as this.
price floor
Total surplus is the sum of these two surpluses.
Consumer and producer surplus
When you evaluate both costs and benefits before choosing among alternatives, you’re doing this kind of analysis.
cost-benefit analysis
This type of economy uses both government planning and market forces.
mixed economy
If the price of peanut butter rises, demand for jelly falls. These goods are…
Peanut Butter
Rent control is an example of this type of government policy.
Price ceiling
On a tariff graph, the rectangular area created by the tariff revenue is located between these two curves.
the tariff price level and world price level
Identify the trade-off in this situation: A government decides to spend more money on defense and less on education.
giving up investment in education for increased defense spending
In the circular flow model, firms sell goods and services in this market.
Product Market
If there is a sudden increase in the price of steel, what will happen to the market for cars?
Supply will decrease
If domestic price is lower than world price, the country will do this in trade.
export
This happens to consumer surplus when a tariff is imposed.
Decrease
Who was Jen's father in unit 1?
Mr. Holden
What are the 4 factors of production?
Land, Labour, Capital, Entrepreneurship
What will happen to the market for Pepsi if LeBron James decides to do an advertisement for them?
Demand will increase
A tariff is...
a tax on imported gods
Deadweight loss on a tariff graph represents this.
What is the lost total surplus from reduced trade?