Demand
Supply
Supply and Demand
PPC
Hodgepodge
100
if price increases quantity demanded will go down
law of demand
100
if price increases then the quantity supplied will increase
law of supply
100
The point where supply and demand meet; tells us the proper price and quantity to be efficient
Equilibrium
100
What does PPC stand for?
Production Possibilities Curve
100
The latin phrase that means "All other things being unchanged"
Ceteris Paribus
200
Slope of demand curve
downward
200
Price's relationship to Quantity Supplied
DIRECT
(One goes up, so does the other)
200
The workers who produce batteries go on strike.
Shift in Supply or Demand? Increase or Decrease
Supply Decreases
200
On the "curve"
Efficient
200
What are the FOUR FACTORS of Production
Land, Labor, Capital, and Entrepreneurship
300
The numeric (table) representation of a Demand Function
demand schedule
300
The expected effect on the market if there were a decrease in the cost of an input.
Increase (right shift) in supply
300
The price of wheat and corn, key resources in the production of cereal decreases.
Supply or Demand, Increase or Decrease, and what is the SHIFTER?
Supply, Increase, Price of RESOURCES
300
In a two product economy, a CONSTANT opportunity cost will appear as this type of Production Possibility Curve.
Linear
300
having a lower opportunity cost for a good gives a producer this
comparative advantage
400
The effect of a personal tax increase in a market (Not a business tax... i.e. People's own individual taxes go up)
decrease (left shift) in demand
(Taxes reduce people's INCOME)
400
The spread of a damaging computer virus would have this effect on the power generation market.
decrease in supply
400
If the price of a good is set too high (Either by a price floor or just choices of producers) it will create this situation.
A Surplus of the good
400
Outside the "curve"
unattainable
400
Soccer balls and basketballs are substitutes. An increase in basketball prices would have this effect on the soccer ball market.
increase in demand
500
Difference between substitute good and complimentary good
-Substitute goods are competitors and have opposite reaction to price changes
-Complimentary goods are used together and have same reaction to price changes.
500
Product A is an input to Product B which is a substitute for Product C.
An increase in the price of Product A has this effect on Product B.
decrease in supply
*shift left*
500
The change in equilibrium price and quantity resulting from a simultaneous increase in supply AND a decrease in demand
PRICE definitely decrease
Quantity is uncertain
500
Concepts represented on a PPC
Scarcity
Choice
Efficiency
Inefficiency
500
France Bushels of Grapes 100
France Bushels of Tomatoes 25
Italy Bushels of Grapes 100
Italy Bushels of Tomatoes 50
(a) Does France, Italy, or neither nation have a comparative advantage in producing grapes? Explain.
France has a comparative advantage in producing grapes and explains that France’s opportunity cost of producing 1 bushel of grapes (0.25 of a bushel of tomatoes) is less than Italy’s opportunity cost of producing 1 bushel of grapes (0.5 of a bushel of tomatoes).
[France’s opportunity cost of producing 1 bushel of grapes is 0.25 of a bushel of tomatoes (25/100 = 0.25)(25/100 = 0.25) . Italy’s opportunity cost of producing 1 bushel of grapes is 0.5 of a bushel of tomatoes (50/100 = 0.5)