First Principles
Explicit + Implicit costs = ____________
Opportunity Cost
Term for the education, knowledge, and skills used to make goods and services.
Human Capital
Term for when a person or nation needs fewer inputs or takes less time to produce a good.
Absolute Advantage
_________ has many buyers and sellers.
Competitive Markets
The method for finding change in percentages.
The Midpoint Method
___________________ think at the margin.
Rational people
Who owns the factors of production?
Households
Term for the ability to produce a good at a lower opportunity cost.
Comparative Advantage
Term for pairs of goods that are used in place of one another.
Substitutes
Term for the magnitude of response of the change in one variable due to a change in another variable.
Elasticity
Less than the marginal benefit
Term for value judgements.
Normative statements
__________ allows someone to consume outside their PPF.
Trade
Term for when quantity demanded is greater than quantity supplied.
Shortage
What does this formula calculate? (percentage change in quantity demanded)/(Percentage change in income)
Income Elasticity
Term for rewards and penalties that motivate behavior.
Incentives
Term for statements of fact.
Positive statement
Term for only producing the good that you have a lower opportunity cost compared to someone else.
Specialization
Where quantity demanded is equal to quantity supplied.
Equilibrium
What type of good has an income elasticity greater than 0?
Normal Goods
Type of cost that is implied from a forgone opportunity.
Implicit cost
Model that shows the different combinations of goods that can be produced.
The production possibilities frontier.
When trading, a producer is willing to accept anything greater than or equal to their _____________.
Opportunity Cost
When income increases, the demand for this type of good increases.
Normal good
If a demand curve has a slope of infinity, what does this tell us about its elasticity?
Perfectly Inelastic