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Cards In This Set
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Define Scarcity
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Humans have unlimted wants and limited means and resources in which to fullfill these wants.
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How do Macro and Micro Economics Vary?
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Macro economics is ocncerned with the economy as a whole where as miroeconomics is concerned with the individual parts of the economy.
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What is oppitunity cost?
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The cost of any activity measured in terms of the best alternative forgone.
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Why are economics models used?
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They are used as a visual representation of two variables, in order to understand complex problems. Are only relavant when ceteris paribus.
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Why isnt the prodction possibility curve a straight line?
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Because all resources arent directly transferrable.
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What are some likely causes of an Increase in the production possibiltiy curve?
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This could be due to an investment in a new plant, discovery of new raw materials, education, and technological advances.
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How is a rational choice made?
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When a person weighs up the marginal benifits of each activity against its marginal opportunity costs. If the marginal benifit exceeds the marginal cost it is a rational choice.
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How do economic Systems Vary?
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Economic systems vary depending on the extent of government control over the distribution of resources.
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Which Economic System shows the least and most amount of control
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Planned Economies - Most
Free Market - Least, decisions made by supply and demand. |
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State the Law of Demand
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When the price of goods rise the demand for those goods will fall.
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What causes a movement in the Demand Curve?
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Tastes, Complimentary Products, Income, Income Distribution and Expectations of Change
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In which direction does the demand curve slope and how does this vary depending on price elasticity?
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A demand curve is always negativley sloped, the more inelastic a good is the steeper the curve.
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A change in price causes a .........demanded
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A change in the quantity demanded
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Which direction will the demand curve move if the price of competing products increases
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To the right as demand has increased
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Which direction willl the supply curve move if there is a technological advance?
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To the right as supply has increased with no price increase.
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