Behavior
Describe the difference between two fields of economics.
Microeconomics - individuals, firms
Macroeconomics - whole economy, countries, trade
PPC stands for
Production Possibilities Curve
What is an opportunity cost?
The option you forgo / lost
The idea that a capitalist economy would be guided by an invisible hand was coined by...
Adam Smith
Name the four factors of production.
Land, Labor, Capital, Entrepreneurship
Statements that are based on facts
Positive statements
PPCs are used to show...
all of the possible combinations of two goods that can be created from a given set of resources
What is an opportunity benefit?
What you gain
benefit = get
This motivates people in a capitalist system.
Profits
Gabbi's cats are named...
Chomsky and Peach
All things that have value are considered ___________.
Scarce
What can algebra term represents the marginal opportunity cost?
The slope of a curve
$36.25
This country is the closest to a full command economy, though no pure command economy exists.
North Korea
What are the three fundamental questions of economics?
WHAT to produce
HOW to produce
FOR WHOM to produce
The underlying assumption of all things equal (Latin)
Ceteris Paribus
Standard form is used for linear PPCs where Ax + By = C. What do A, B, and C mean in these equations?
A and B = price of good x and y respectively
C is the budget
A country produces two goods, A and B. To increase production from 300 units of A to 350 units of A, it decreases production of good B by 100 units. What is the opportunity cost of the increase of 1 unit of good A?
100/50 = 2 units of Good B
Name two pros and two cons of the Nordic model system.
Answers vary.
Entrepreneurship = innovation, which means new goods and services that benefit profit-seeking producers and cost-minimizing consumers.
A measurement referring to the satisfaction received from consuming a good or service.
What are the four assumptions of PPCs?
Fixed labor/employment, fixed resources, fixed technology, two goods only
Describe the law of increasing opportunity cost.
As you increase the production of Good A, the opportunity cost to produce the Good A will increase because the resources used would be better used to produce Good B.
Socialism promotes a democratically elected central government
What is the difference between private property and personal property?
Private property can be used to create goods/services/profit
Personal property is your own goodies