unit 1 ap macro

If the country were to move from point A to point C, then what is the opportunity cost? point A: 0 guns, 10 butter point C: 4 guns, 6 butter

4 butter

utility

satisfaction

Economists consider the choices people must make as originating from ______? tastes & preferences, variety&market availability, affluence versus poverty, scarcity, or ups&downs of the business cycle.

scarcity

which fundamental economic concept forces producers and consumers to make trade-offs? scarcity, surplus, resources, consumption, or price.

scarcity

supply

the different quantities of a good that sellers are willing and able to sell (produce) at different prices

price flooring

the legal minimum price that a seller can sell a product (surplus)

shift

quantity goes up or down

Using the graph, which of the following will allow this economy to move from point B to point E? 1: government subsidies for constructing factories. 2: decrease in infant mortality rates. 3: deflating consumer good prices.

1&2

5 shifters of supply

1. Price of Resources 2. Number of Producers 3. Technology 4. Taxes and Subsidies 5. Expectations

5 shifters of demand

1. Tastes and Preferences 2. Number of Consumers 3. Price of Related Goods 4. Income 5. Future Expectations

3 Shifters of the PPC

1. change in resource quantity or quality 2. change in technology 3. change in trade

Country x and Country y can either produce cell phones or sneakers. in the country x, the opportunity cost of 1 cell phone is 3 pairs of sneakers. in country y, the opportunity cost of 1 cell phone is 8 pairs of sneakers. Which of the following would NOT be acceptable terms of trade for country x and country y? 1 cp for 3s, 1cp for 5s, 1cp for 1s, 1cp for 4s, or 1cp for 7s.

1cp for 1s

double shift

2 curves shift at the same time, either price or quantity will be indeterminate

which would increase the quantity supplied of a product? 1- tech improvements 2-increase in price for the product 3-decrease in business taxes

2 only

price ceiling

A legal maximum on the price a seller can charge for a product (shortage)

shortage

A situation in which quantity demanded is greater than quantity supplied

surplus

A situation in which quantity supplied is greater than quantity demanded

scarcity

A situation in which unlimited wants exceed the limited resources available to fulfill those wants

trade-offs

ALL the alternatives that are given up when you make a choice

according to the law of supply, if the price of a product decreases, one would expect

quantity supplied to decrease

suppose two countries could produce milk or rice. use the list to identify the different reasons countries should trade. 1: countries should trade if they want to be self sufficient 2: countries should trade only if they have a comparative advantage in both milk and rice 3: countries should trade only if they have absolute advantage in rice and milk production.

NONE OF THE OPTIONS ON THE LIST

Law of Supply

The positive relationship between price and quantity of a good supplied, price inc. leads quantity inc. and price dec. leads to quantity dec.

economics

The science of scarcity; the science of how individuals and societies deal with scarcity

Ceteris Paribus

a Latin phrase that means "all other things held constant"

Ceteris Paribus, consumers will wish to buy cowboy boots at each and every price if

a country and western dance trend spreads across the country

marginal

additional

price

amount a buyer pays (supply and demand graph: doesn't change the demand)

human capital

any skills or knowledge gained by a worker through education and experience

consumer goods

created for direct consumption (the outcome of capital goods)

capital goods

created for indirect consumption (what makes consumer goods)

subsidies

government payment to a business or market causes a supply of good to increase

factors of production

land, labor, capital, and entrepreneurship

You sleep 7 hours a day. You're representing your other 17 hours of the day of a PPC graph, dividing that time into work and play. Your PPC graph will look like... concave, convex, vertical, linear, or horizontal.

linear

which of the following is NOT considered a land resource in economics? Acreage, trees, diamonds, soil, or labor.

labor

marginal benefit

maximum amount a consumer is willing to pay for an additional good or service

productivity

measure of efficiency that shows the # of outputs per unit of input

which points would be least likely to allow future economic growth? a&b, b, c&d, c, or only d.

only d

if the government set a price at the green line which of the following would occur? shortage, price ceiling, price floor, allocative efficiency, or equilibrium.

price floor

income effect

price goes down, purchasing power increases for consumer

substitution effect

price goes up, consumers buy less of that product and more of another product

which would trigger a decrease in the quantity demanded for the stated technology?

prices of new generation smart phones increase in 2015

absolute advantage

producer produces the most output

when the supply curve shifts to the left, and the demand curve doesn't shift, we can expect...

that the price will increase and quantity will decrease

cost

the amount a seller pays to make goods

If the supply of coffee increases at the same time as the demand for coffee increases, what will happen to the equilibrium price and quantity of coffee?

the change in equilibrium price will be unknown and the quantity will increase.

marginal cost

the change in the total cost that rises when the quantity produced is increased

investment

the money spent by businesses to improve their production

opportunity cost

the most desirable alternative given up as the result of a decision

market equilibrium

the point that both curves cross

comparative advantage

the producer with the lowest opportunity cost

microeconomics

the study of small economic units like households and firms make decisions and how they interact in markets

macroeconomics

the study of the large economy as a whole, including topics such as inflation, unemployment, and economic growth

allocate

to distribute

how to get rid of surplus?

to lower the price

Law of demand

when more expensive, less people want it

demand

willing and ability to buy at different prices