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Scarcity: The Nature of Economic Systems
Opportunity Cost and Production Possibilities
Specialization and Comparative Advantage
The Functions of Any Economic System
Demand, Supply, Price Determination
100
the social science concerned with the efficient use of scarce resources to achieve the maximum satisfaction of economic wants
What is economics?
100
Employment of resources that provide the maximum possible satisfaction of our economic desires.
What is full production?
100
When it can produce a product at a lower domestic opportunity cost than a potential trading partner.
What is comparative advantage?
100
A particular set of institutional arrangement and a coordinating mechanism.
What is an economic system?
100
States that as price rises, the corresponding quantity supplied rises and as price falls, the quantity supplied falls.
What is the law of supply?
200
limits our options and necessitates that we make choices
What is scarcity?
200
A representation of the maximum combination of two products which can be produced if full employment and full production are achieved.
What is a production possibility curve
200
increases the total output available for nations that trade with one another
What is specialization?
200
the type of economic system that believes in private ownership.
What is a market system?
200
Non-price factors that will increase or decrease demand.
What are determinants of demand?
300
Factors of production include land, labor, capital, and ...
What is entrepreneurial ability?
300
The amount of other products that must be forgone or sacrificed for the production of another product.
What is opportunity cost?
300
An accountant needs her house painted. It would take her 30 hours to paint the house and a painter 40 hours to paint the house. Being an accountant she makes 50$ an hour. She would have to pay the painter 15$ an hour. Should she paint it her-self or hire the painter?
What is although she could paint the house quicker her-self she should still hire the painter because the opportunity cost would be $1500 for her to do it while only $600 to hire the painter.
300
in a command system, they decide what good and how much of that good gets produced.
What is the central planning board appointed by government?
300
resource prices technology taxes and subsidies number of sellers
What are determinants of supply?
400
economic goal provides suitable jobs for all citizens who are willing and able to work
What is full employment?
400
The more of a product that is produced, the greater the opportunity cost.
What is the law of increasing opportunity cost?
400
It is beneficial to the two nations if the comparative costs of producing the two products within the two nations differ.
What is beneficial specialization?
400
the two broad markets of the market economy system.
What are the product market and resource market?
400
Indicates that a lower price increases the purchasing power of a buyer's money income, enabling the buyer to purchase more of of the product
What is the income effect?
500
the process of producing and purchasing capital goods
What is investment?
500
1) increase in supply of resources 2) improvement in the quality of resources 3) technological advances
What are the causes of economic growth?
500
If Mexico’s domestic comparative cost ratio is 1 soybean : 4 avocados, and U.S’s comparative advantage is 1 soybean: 3 avocados, who should specialize in soybeans? And who should specialize in avocados?
What is U.S should specialize in soybeans, while Mexico should specialize in avocados.
500
A) provides rules for economic activity B) promotes economic stability C) economic growth D) provides goods and services E) distribution of income
What are the 5 roles the government has in the Capitalistic economy?
500
Any price below equilibrium where the quantity demanded is greater than the quantity supplied.
What is a shortage?