ECON Vocab 1
What is the study of the production, consumption, and distribution of goods and services?
Economics
This type of advantage occurs when a country can produce more of a good with the same resources than another country.
Absolute advantage
Insulin (many correct answers)
What is the law of supply?
As price increases, so does quantity.
Does the real world work the way we describe it in economics?
No.
The value of time, money, goods, and services given up in an economic choice.
Opportunity Cost
This type of advantage occurs when a country can produce a good at a lower opportunity cost than another country.
Comparative advantage
True or False: Capitalist countries like the United States are examples of what we mean by perfectly competitive economies.
False
What kind of shift would a crop failure typically be?
Supply shift
All models are wrong; some are _____
useful
The law that states: when price increases, quantity sold also increases. When price decreases, quantity sold also decreases
Law of Supply
If the U.S. can produce 10 tons of wheat or 5 cars, and Japan can produce 5 tons of wheat or 5 cars, which country has the comparative advantage in cars?
Japan
True or False: Free trade makes both parties better off.
True
What is the equilibrium point and what is it used for?
The point in which supply and demand cross, this is where price should be set.
Descriptive; provable
The limit of an firm or country's ability to produce various combinations of outputs
Production Possibilities Frontier (PPF)
True or False: In a scenario involving only two countries who each produce the same two goods, one country can have a comparative advantage in both goods if they are very efficient.
False
Give one cause of scarcity.
1. Personal Perspective
2. Poor Distribution of Resources
3. Rapid Increase in Demand
What are the factors of production?
A market with only one seller. An example is local power companies; often only one company is allowed to supply power for a region (such as Nevada) (go Pack)
The degree to which changes in price cause changes in demand or supply
Elasticity
France can produce 100 units of cloth or 200 units of wine. England can produce 100 units of cloth or 160 units of wine. What is the acceptable range of trade terms (in units of wine per cloth) that would benefit both countries?
What are some core characteristics of a perfectly competitive economy?
Perfect Information, Perfect Rationality, No entry/exist cost, Perfect substitution
Taxes represent what kind of shift? Specify the curve and direction (Right/left).
Supply, left
What are the two forms you need on Friday, and where and when do you need to be?
- Meal selection form
- Media waiver
- McGowan hall at 9 am