Chapter 1 Econ tricky

The _____ explains that the quantity demanded tends to be higher when the price is lower.

law of demand

How are inefficient uses of inputs represented on the graph of a production possibility frontier?

By points inside the production possibility frontier

_____ occur when a good becomes less valuable because other people use it. If more people buy such a product, your demand for it will _____.

Congestion effects; decrease the opposite is network effects and increase like snapchat

When you read the individual demand curve, you will see that as the price gets lower, your quantity demanded get higher. This is because the individual demand curve is a _____ line

downward sloping

Under a competitive market, the rational rule for sellers tells you that you should sell one more item if the price is:

greater than (or equal to) the marginal cost.

market economy

indivuals hold there decisions within the market

The factors that can change _____ will shift your supply curve.

marginal costs

The _____ is a graph plotting the total quantity of an item supplied by the entire market, at each price.

market supply curve

What is the main difference between market and planned economies?

shortage leads to price increases.

Using the rational rule allows business owners to experiment their way to the point where:

total profits are maximised

planned economy

when there is from a center person.