Econ Exam #1
When a California farmer decides to harvest lettuce by the use of machines instead of by migrant workers the farmer is answering the --- question
"how"
when a firm decides to produce more electric cars and fewer gas guzzlers, it is most directly answering the -- question
"what"
The night before the midterm exam, you decide to go to the movies instead of studying for the exam. You score 60% on your exam. If you had studied the night before you'd have scored 70%. What was the opportunity cost?
10% off your grade
Suppose Joe can prepare 20 sandwiches or 10 pizzas in an hour and Beth can produce 36 sandwiches or 27 pizzas. The concept of comparative advantage concludes
Beth should produce pizza and Joe should produce sandwiches
Suppose a country of Popcorn produces only jets and corn. If Popcorn cannot produce any more jets without giving up corn, we say that Popcorn has achieved
Production Efficiency
the principle of decreasing marginal benefit implies that
additional benefit from obtaining one more of a good or service decreases as more is consumed
A person has a comparative advantage in producing a particular good if that person
can produce it at lower opportunity cost than anyone else can
economic growth comes from
capital accumulation and technological advance
a marginal cost curve
is upward sloping; shows that a more of a good is produced, opportunity costs of producing another unit increase
Factors of production include
land, labor, capital and entrepreneurship
Scarcity is a situation in which
people cannot satisfy all their wants
when economic growth occurs, the
production possibilites frontier shifts outward
the opportunity cost of good A in terms of good B is equal to the
ratio of the money price of good A to the money price of good B
The demand for a good increases when the price of a substitute-- and also increases when the price of a complement
rises; rises
If the supply of spring water decreases and at the same time the demand for spring water increases, the equilibrium price -- and the -- equilibrium quantity--
rises;might increase, decrease, or stay the same
the law of demand states that, other things remaining the same, the higher the price of a good, the
smaller is the quantity of the good demanded
the opportunity cost of something you decide to get is
the highest valued alternative you give up to get it
Each point on a supply curve represents
the lowest price for which a supplier can profitably sell another unit
the supply curve slopes upward when graphed against --, because of --
the price of a good; increasing marginal cost
if both demand and supply increase, what will be the effect on the equilibrium price and quality?
the quantity will increase but the price will either rise, fall or remain the same
Positive stament example
when the national unemployment rate is 9%, the unemployment rate for inner-city youth is often close to 40%