Foundations and Supply Flashcards
C.E.L.L.
Capital
Entrepreneurship
Land
Labour
Rationing Systems
Opportunity costs: the next best alternative foregone when an economic decision is made
Scare Resources
Four F.O.P.’s (CELLS’S)
Resource Allocation
Assigning F.O.P’s and their quantities to “what” and “who” questions
Ceteris Paribus
Other things being equal - i.e. all things but the variable you are looking at are constant
Rational economic decision-making
Assumption that all economic desicion makers act in their best self-interest, trying to maximize their satisfaction or benefit they receive from their economic desicions
Positive vs Normative
A statement that can be proven right or wrong vs belief statements
3 Types of Economics
Planned economics, free market economics, mixed economics
Economic Growth vs Economic Development
Economic Growth: Expansion of production possibilities.
Economic Development: Raising the standard of living.
Demand
The quantity of a good or service that consumers are willing and able to purchase at a given price in a given time
Demand Curve
A curve showing the relationship between the quantities of a good consumers are willing and able to buy during a particular period. (Ceteris Paribus)
Law of Demand
If price increases demand decreases, if price decreases demand increases
Negative Casual Relationship
A relationship between two variables in which an increase in the value of one causes a decrease in the value of the other
P.I.N.T.
Price of related goods
Income (inferior goods and normal goods)
Number of buyers in the market
Taste and preferences
The difference between a movement and a shift of the demand curve?
Movement - Change in price
Shift - Change in P.I.N.T.
