Vocabulary
The word "economy" comes from the Greek word oikonomos, which means
"one who manages a household"
What is found by comparing different producers' input requirements per unit of output?
Absolute advantage
What is a normative statement?
A statement of value
The productions possibility frontier is a graph that shows the various combinations of output that an economy
a. should produce
b. can produce
b. Can produce
Who is the professor of ECON202?
Phillip Miller
What does scarcity mean?
Human wants are unlimited, but resources are limited
If Shawn can produce more donuts at a lower opportunity cost than Sue can, then Shawn has what type of advantage?
Comparative advantage
What is a positive statement?
A statement of fact
Where can an economy not produce?
Outside its production possibilities frontier
Which famous economist developed the principle of comparative advantage as we know it today?
David Ricardo
What is opportunity cost?
What must be given up to obtain something else
Refer to the table on the board. Falda has an absolute advantage in the production of what?
Wheat
Positive or normative statement: You are an ECON202 student.
Positive statement
Production is efficient if the point is where?
On the curve
For an economist, is the idea of making assumptions generally regarded as a good one or a bad?
Good idea, since doing so helps to simplify the complex world and make it easier to understand.
What is market power?
The ability of a buyer or seller to influence the market price
Refer to the table on the board. Varick has an absolute advantage in what?
Cloth
Positive or normative statement: Dogs are better than cats.
Normative statement
At which point on the curve is an economy producing its maximum possible quantity of Tubas?
When the point is touching the X axis
The adage, "There is no such thing as a free lunch," is used to illustrate what principle?
People face tradeoffs
What are the Corn Laws?
Regulations on the market for wheat imported from England
Refer to the table on the board. Falda has a comparative advantage in what?
Wheat
Positive or normative statement: It is January.
False positive statement
Unemployment would cause an economy to produce where on the curve?
Inside its production possibilities frontier
In the circular-flow diagram, in the market for goods and services, who are the buyers and who are the sellers?
Households are buyers; Firms are sellers