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If we are looking at an output question, how would you determine who has Absolute Advantage?
Whoever can produce more
What is the relationship between price and quantity?
Inverse
What is the relationship between price and quantity?
Direct
Where Supply and Demand intersect is called...
Equilibrium
How do you determine who has comparative advantage?
Whoever gives up the least to produce something
A decrease in the price of X will increase the demand of substitute product Y
False
When the government acts to give a subsidy to a business, what does this mean?
Giving a business monetary payment to help produce something to the market causing an increase in supply
Too much supply and not enough demand creates what?
A surplus
A point that is found outside the PPC is referred to as what?
An impossible point
Mike produces 3 apples and 10 skateboards in an hour
John produces 2 apples and 8 skateboards in an hour
Who has the absolute advantage in skateboards?
Mike
Avocados, a Normal Good, would cause an increase or decrease in overall demand if the following scenario happened -
15% of the working people lost their job during the pandemic
decrease in demand
100 new milk producers hit the market on the east coast, how does this affect overall supply of milk?
This would cause an increase in overall supply
Too much demand and not enough supply creates what?
A shortage
When two resources are not easily adaptable on a PPC, this results in what type of line on the PPC
A bowed out curve
If Mike can make 2 surfboards per hour or 10 bikes per hour and Joe can produce 4 surfboards per hour and 12 bikes.
Who has the comparative Advantage in Surfboards?
Joe
Assuming Ramen noodles are an inferior good, a decrease in income will shift the demand curve which way?
To the right for an increase
Supply would increase now and decrease at the end of the year
An increase in price of a complimentary good would cause the demand for the complimentary good to do what?
Decrease
a point inside the curve
In 10 hours, Mike can produce either 2 tons of grain or 4 cars. In the same amount of time, Robert can produce either 5 tons of grain or 25 cars.
Who has the absolute advantage in producing cars?
Robert
If we are analyzing milk, the following scenario would cause an increase or decrease in overall demand?
The price of milk increases from $5 a gallon to $6.25 a gallon
Neither, price never shifts the curve
Government decides to increase tax's businesses nationwide by 5%. How does this affect supply?
Overall decrease in supply
The market good is hot dogs. If the price of hot dogs decrease, this will cause what to occur on a supply and demand curve?
A shortage