Definitions
Differentiate
Practice
Count-off
Graphs
100
What is the study of economics
The study of how individuals and societies allocate their limited resources to satisfy their unlimited wants
100
What is the difference of a Direct and Indirect incentives
Direct is a direct factor to motivate one (generally easy to recognize)
Indirect brings secondary change in behavior (More difficult to recognize)
100
Juan decides to put more hours into his plumbing business, which will decrease the amount of hours he puts into the family business. This situation illustrates
A.Scarcity
B.Incentive
C. Trade-off
D.Comparative advantage
C.Trade-off
100
Name the five foundations of economics
Incentives, Trade-offs,Opportunity costs, Marginal Thinking, Trade
100
What Points are attainable in the PPF?
A, B, C, D
200
What is Opportunity Cost
The highest-valued alternative that must be sacrificed to get something else
200
What is the difference between Positive and Normative Statement?
Positive statements can be tested and validated ("What Is")
Normative statements are an opinion that cannot be tested or validated ("What ought to be")
200
What is the opportunity cost of watching Barbie?
A. Ticket Price
B.Popcorn
C. Studying for exams
D. Skittles
C. Studying for exams
200
What are the 3 assumptions made in a PPF?
Technology is fixed, the quantity of resources are fixed, and society produces only two goods
200
Does the graph show a surplus or a shortage
Shortage
300
What is the Production Possibilities Frontier (PPF)?
PPF is a model that illustrates the combinations of outputs that a society can produce if all of its resources are being used efficiently
300
What is the difference between Endogenous and Exogenous Factors?
Endogenous factors are variables that can be controlled for inside a model
Exogenous factors are variables that cannot be accounted for in a model
300
Who has the absolute advantage?
Person Goals Assists
Ronaldo 50 80
Messi 45 72
Ronaldo
300
What are the three characteristics of a competitive market?
The goods sold by each vendor are similar/identical
Many buyers and sellers with free entry/exit
No one individual has any influence over the price, all are price-takers
300
Assume that the market of soccer cleats has found a cheaper producer and the Euro cup just started. What would the change be in quantity and price?
Quantity increases and the change in price is ambiguous
400
What is the law of Demand?
All else equal, there is an inverse relationship between price and quantity demanded
400
What is the difference between a surplus and a shortage?
Shortage occurs at any price below equilibrium, when demand exceeds supply
Surplus occurs at any price above equilibrium, when supply exceeds demand
400
What is the equilibrium price and quantity in the market? (Round to the nearest hundrenth)
QD=30-8P QS=5P
30-8P=5P
30=13P
2.31=P
Q=5(2.31)
Q=11.55
400
What are the five factors that shift supply?
The cost of inputs, changes in technology, taxes and subsidies, number of sellers, and price expectations
400
Assume that the market of Gym straps has a technological advancement which reduces the cost of making them, and the Powerlifting competition just started? assuming that the technological advancement increased more than the amount of people watching the powerlifting competition, what is the change in quantity and price?
Price decreases and Quantity Increases
500
What is the law of Supply?
All else equal, there is a direct relationship
between price and quantity supplied
500
What is the difference between Absolute and Comparative advantage?
Absolute advantage refers to the ability of one producer to make more than another producer with the same quantity of resources
Comparative advantage is the ability to produce a good at a lower opportunity cost
500
Who has the comparative advantage?
Person Goals Assists
Modric 20 60
Iniesta 45 20
Person Goals Assists
Modric,3 Assists for 1 goal (60/20),0.33 goals 1 assist (20/60)
Iniesta, .44 assists for 1 goal (20/45),2.25 goals 1 assist (45/20)
Modric has the competitive advantage for assists
Iniesta has the competitive advantage for goals
500
What are the five factors that shift demand?
Changes in Income, Price of related goods, Changes in Tastes and Preferences, Price Expectations, and Number of Buyers
500
Assume that in cinematography, cameras and lighting have a technological advancement, lowering their cost, and at the same time cinemas have had less ticket sales this quarter. What is the change in quantity and price and is there a change in the PPF of cameras and lighting?
The PPF of cameras and lighting will extend to the right, as they could make more of both.
Price decreases and the change in quantity is ambiguous