Basics
People who study and observe choices made by individuals in a society are known as...
Economists
(True or False) - If a point is plotted right under the curve on a PPC, it's a production impossibility.
False
What is the main purpose of economic models?
To explain and analyze prices and quantities traded in a competitive market
What is Economics?
The study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and the incentives that influence and reconcile those choices.
State the Law of Demand
when the price of a product goes up, the quantity demanded will go down – and vice versa
Give an example of a visual model.
Demand Curve - PPC
What are the three most basic economic questions?
what to produce, how to produce it, and who to produce it for.
What happens to a curve in a Production Possibilities Graph if resources become more available?
Shifts to the right
What are the 4 main types of economic models?
Identify all four types of economic systems.
traditional economies, command economies, mixed economies, and market economies.
Compare and contrast demand schedules and demand curves.
A demand schedule is a table or a list that shows the quantity demanded at each price. A demand curve is a graph that shows the quantity demanded at each price
Identify two crucial roles of economic models
Simplification of Reality, Hypothesis Testing, Predictive Power, & Communication Tool.
What's the difference between self-interest and an incentive?
Self-interest refers to actions that elicit personal benefit, while incentives are benefits or costs of an action that influence people's decisions and behavior
What are substitute goods?
Goods that can be used to used to replace the purchase of similar goods when prices rise.
How are mathematical models similar to empirical models? (identify one similarity)
They both rely on mathematical equations to portray gathered information and data.