Intro to Economics
What is the unifying feature of all that economists study?
Choice
The Law of Demand shows that there is a ________ relationship between price and quantity demanded.
Negative
Which term refers to a legally established minimum price that firms may charge?
Price Floor
A tax imposed by a government on imports of a good into a country
Tariff
The highest-valued alternative that must be given up to engage in an activity
Opportunity Cost
The special situation in which everyone is simultaneously optimizing
Equilibrium
The amount of a good that firms want to sell at a given price
Quantity Supplied
The difference between the willingness to pay and the price paid for the good
Consumer Surplus
A limit placed on the quantity of goods that can be imported into a country
Quota
An economic agent is said to have a comparative advantage if they have a _______ opportunity cost.
Lower
What are the three key principles of Economics?
Optimization, Equilibrium, and Empricisim
What does a leftward shift of the demand curve indicate?
A decrease in demand
The reduction in economic surplus resulting from not being in competitive equilibrium
Deadweight Loss
A situation in which a country cannot trade with other countries
Autarky
The ability of an individual, firm, or country to produce a certain good at a lower opportunity cost than other producers
Comparative Advantage
When two variables change in opposite directions
Negative correlation
A buyer or seller who accepts the market price
A price-taker
What kind of price restriction is rent control an example of?
Price Ceiling
A ___________ shows the relationship between the maximum production of one good for a given level of production of another good
Production Possibilities Curve
Goods that are bought domestically, but produced in other countries
Imports
______ is analysis that generates objective descriptions or predictions about the world that can be verified with data.
Positive Economics
Two goods are _______ when a rise in the price of one leads to a rightward shift in the demand curve for the other.
Which type of price restriction would cause a shortage of a good?
Price Ceiling
What is the formula used to calculate Opportunity Cost?
The ability of an individual, firm, or country to produce more of a certain good than other competing producers, given the same amount of resources
Absolute Advantage