What are resources
What is a price ceiling?
A legal maximum on the price at which a good can be sold
What is a price floor?
A legal minimum on the price at which a good can be sold
What is market failure?
It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit equals marginal social cost.
what is market demand and how is it calculated
Market Demand refers to sum total of demand of all individuals in the society. It can be calculated by simply adding up demands of all individuals in the market. Market Demand Schedule
what is demand
The desire, willingness, and ability to buy a good or service
What is macroeconomics?
The study of the economy as a whole
what is the difference between an increase in supply and an increase in quantities supplied
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What is an externality?
a benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service
What is a demand curve?
a curve that shows the relationship between the price of a product and the quantity of the product demanded
what is a market price system
a price system is a component of any economic system that uses prices expressed in any form of money for the valuation and distribution of goods and services and the factors of production.
what makes a market system efficient
a system that automatically moves resources to where they are most needed.
What is a demand schedule?
a table that shows the relationship between the price of a good and the quantity demanded
What is ceteris paribus?
all things being equal
what is economic growth and how can it be shown
an increase in the amount of goods and services produced of the population over a period of time.
what is a change in demand and a change in quantities demanded
changed in quantity demand is a change in price;
what are complementary goods
consumed together
Inferior goods are
demand goes down when price goes up
Normal goods are
demand goes up with income
What is microeconomics?
economics of an individual
public goods
goods for everyone
what are substitute goods
goods that can be used in place of others
what makes it difficult to satisfy all human wants
not enough goods
What is the basic economic problem?
scarcity
what does the law of demand state
that more of a product will be purchased at low prices than at high prices.
comparative advantage
the ability to produce a good at a lower opportunity cost than another producer
absolute advantage
the ability to produce a good using fewer inputs than another producer
what is production
the creation of goods and services
what's positive economics
the economy producing just enough
What is antitrust legislation?
the laws were instituted to encourage free enterprise.
What does a production possibilities curve show?
the maximum combinations of goods and services that can be produced from a fixed amount of resources in a given period of time
opportunity cost
the most desirable alternative given up as the result of a decision
What is economics?
the study of how people make decisions with limited resources
What are resources?
the things we can gather and use to help our economy
what does the law of supply state
there is a positive relationship between price and quantity supplied
free rider problem
those enjoy services without paying
What is equilibrium price?
where supply and demand are equal
