Scarcity
What is the definition of Scarcity?
A limited amount of resources to meet unlimited wants and needs.
What is economics?
The study of how individuals, families, businesses, and societies use limited resources to fulfill their unlimited wants
Supply and demand ultimately determine the ______ equilibrium and _______ equilibrium of a product.
quantity/price
What is supply?
Quantity supplied of a product
When a war breaks out in the Middle East and the global supply of oil decreases, the price of gasoline in the United States
goes up.
Why do we have Scarcity?
We have unlimited wants and needs BUT limited resources create scarcity.
What is microeconomics?
Examines 1 product, 1 firm, 1 industry, or 1 person.
If demand INCREASES will the demand curve shift to the right or to the left?
Right
True or false: Output prices affect supply.
False
In most free market-based economies, surpluses and shortages are only temporary because of the law of
Supply and Demand naturally work towards equilibrium
What are the three causes of scarcity?
Personal Perspective: your own feelings of what is wanted and needed.
Poor distribution of resources: not using your resources to their potential.
Rapid increase in demand: a sudden rush to use resources can cause a shortage.
What is Macroeconomics?
examines behavior of the whole economy at once
True or false: Income influences demand.
True
If there is a decrease in supply, what way does the curve shift? Right or left?
Left
True or False: Command economies are run by governments
True
Amazon recently implemented drone delivery, a technological innovation, which allows them to expedite deliveries on all small packaged goods. Which of the following graphs would represent this improved technology? draw it
Supply increase, Price Decrease
If the government increases taxation on cigarettes, which graph would most likely occur? Draw it!
Supply Decrease, Price increase
What happened to the demand of toilet paper during covid?
It Increased
An oil well explosion reduces the amount of oil available to make gasoline for cars and trucks. What will happen to the price of gas?
Price of gasoline will increase.
A shift to the left in the supply curve indicates a ___ in supply while a shift to the right indicates a ____ in supply.
Decrease/increase
Give an example of opportunity cost.
The #1 alternative is the opportunity--the choice you do NOT make.
What are the three economic questions?
1. What to produce?
2. How to produce it?
3. For whom to produce?
If the demand of tamales increases during the holidays but the supply of corn husks decreases, what will happen to the price of tamales?
It will increase.
What happens to the market for oranges when a cold snap hits Florida?
supply goes down and prices go up.
If the price of the good is too low, then the supplier will end up with a
shortage