Unit 1
This economic principle states that we face limited resources.
What is scarcity?
This Curve is downward sloping
What is Demand?
Costs that do not change with output level.
What are fixed costs?
The additional benefit received from consuming one more unit.
What is marginal benefit?
This Graph has a demand and a supply curve
What is the Supply and Demand Graph?
The opportunity cost of choosing one option over another is this.
What is the next best alternative foregone?
The law stating quantity demanded decreases as price increases.
What is the law of demand?
The stage of production where marginal product is negative.
What is the stage of diminishing returns?
Goods that are often used together, like peanut butter and jelly.
What are complementary goods?
A graphical representation of costs per unit over time.
What is the long-run average cost curve?
A curve that shows the maximum possible output combinations of two goods.
This event causes a leftward shift in the supply curve.
What is an increase in input costs?
The condition where marginal cost equals marginal revenue.
What is profit maximization?
The economic cost including both explicit and implicit costs.
What is opportunity cost?
A graph with a vertical supply curve represents this market condition.
What is perfectly inelastic supply?
A point inside the PPC indicates this type of resource usage.
What is inefficient resource allocation?
The difference between the willingness to pay and the price paid.
What is consumer surplus?
In the short run, this type of cost must always be paid.
What are fixed costs?
A legally established maximum price below equilibrium.
What is a price ceiling?
The area on a graph representing lost efficiency due to market changes.
What is the Deadweight Loss?
A market system where decisions are guided by customs and traditions.
What is a traditional economy?
The responsiveness of quantity demanded to a price change.
What is price elasticity of demand?
The market structure with no barriers to entry and identical products.
What is perfect competition?
A market dominated by a few large firms is called this.
What is an oligopoly?
The point on a PPC where one good is maximized at zero of another.
What is an extreme point?