PPC
An institution that brings together buyers ("demanders") and sellers ("suppliers") of particular goods, services, or resources.
What is a market?
This advantage occurs when a producer can produce more of a good using the same amount of resources.
What is absolute advantage?
This fundamental economic principle states that as prices rise, the quantity demanded of a good or service typically falls.
What is law of demand?
This economic law states that there is a direct relationship between price and quantity supplied.
What is Law of Supply?
This is the price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.
What is equilibrium price?
When a nation produces inside its PPC, this economic concept is being experienced.
What is the product inefficiency?
If Papa John can produce 100 pizzas or 200 burgers, what is his opportunity cost of producing one pizza in terms of burgers?
What is 2 burgers?
In a market for luxury watches, when consumer income decreases during a recession, the demand curve shifts left. However, for instant ramen noodles, the demand curve shifts right during the same recession. This economic term describes goods like instant ramen noodles in this scenario.
What is an inferior good?
A new machine is invented that makes milk production faster and more efficient. What will happen to the supply curve?
What is an increase in supply (shift to the right)?
If the price of a good is set above the equilibrium price, what market condition occurs?
What is a surplus?
This term describes the maximum combinations of two goods that can be produced with given resources and technology
What is a Production Possibilities Curve?
According to the theory of comparative advantage, countries should specialize in producing goods that have the lowest what?
What is opportunity cost?
When the price of butter increases, consumers often buy more margarine instead. This relationship between butter and margarine, where an increase in the price of one good leads to an increase in demand for the other, describes this type of goods.
What are substitute goods?
If the price of milk increases, what happens to the quantity supplied?
What is an increase in quantity supplied (movement along the curve)?
When a market experiences a shortage, what happens to the price over time?
What is the price increases until equilibrium is restored?
When a country experiences this, its PPC shifts outward uniformly, indicating an equal increase in production capacity for all goods.
What is technological advancement?
If Kenya gives up 3 pineapples to produce 1 radio, and India gives up 1 pineapple to produce 1 radio, what terms of trade would benefit both countries?
What is 1 radio for 2 pineapples?
When the price of a pizza increases from $10 to $15, this happens to quantity demanded along the demand curve
What is a movement upward along the curve and a decrease in quantity demanded?
This type of government payment to producers increases the supply of a good by reducing production costs.
What is subsidy?
A price ceiling set below the equilibrium price creates this type of market condition.
What is a price shortage?
In a PPC showing computers and robots, if the opportunity cost of each additional computer increases as more computers are produced, this economic principle is being illustrated.
What is the law of increasing opportunity costs?
What happens to a country’s production possibilities curve (PPC) when it engages in trade and specializes in its comparative advantage?
What is the PPC shifts outward (showing more overall production due to trade benefits)?
When the price of hot dogs increases, we see this movement along its demand curve, AND when the price of hamburgers decreases, we see this shift of the hot dog demand curve, showing this type of relationship.
What is upward movement along the curve, leftward shift, and substitute goods?
Name three of the five major factors that shift the supply curve.
What are input prices, number of sellers, technology, government action (taxes & subsidies), and expectations of future profit?
If the quantity supplied at a price of $4 is 40 units, but the quantity demanded is only 20 units, what is the surplus in the market?
What is 20 units?