Supply
What is supply?
The willingness and ability to sell a product.
Define demand.
Demand is the willingness and ability to buy something.
Why are there opportunity costs?
Because resources are limited.
What are factors of production?
Land, labour, enterprise and capital.
Price elasticity of supply measures the responsiveness of quantity supplied to change in price.
What is more beneficial to producers, elastic demand or inelastic demand?
Inelastic
What is the opportunity cost if a government chooses to build a school.
Anything that they could invest in such as hospitals etc.
What does a PPC show?
The opportunity cost of producing more of one product in terms of how much of another must be given up.
Why supply and price are positively related?
Because people are more willing and able to sell when the price is high.
What brings a demand change?
What is a the production possibility curve?
a graph that shows how much an economy can procure between 2 goods.
What is the basic economic problem?
Scarce resources cannot satisfy unlimited wants.
What is one the factors that affect supply?
Availability of resources, labour productivity, disasters and war, taxes and subsidies, weather, etc.
Using an example, explain how to distinguish between a movement along the demand curve and a shift of demand curve.
Movement is caused by a change in price while a shift is caused by anything not price
A woman owns a TV which she bought for 300. she is considering buying a better modle for 450. Her neighbor is offering 200, what is her opportunity cost if she rejects?
200
What is resource allocation?
The action of deciding how to use scarce resources to satisfy as many needs and wants as much as possible.
This concept explains why a firm may increase output when prices rise: it states that higher prices provide an incentive for producers to supply more goods to the market.
Law of Supply
Name 3 non price determinants of demand
Changes in income, tastes and preferences, prices of related goods (substitutes and complements), the number of buyers, and consumer expectations about the future
The opportunity cost is the value of the _______ that had to be given up for the alternative that was chosen.
the next best alternative
What is production?
Using inputs (resources) to make outputs (goods and services) to satisfy the needs and wants of consumers