Mid Term Review Flashcards
Economics definition
Economics is the study of how human beings coordinate their unlimited wants in a world of limited resources
Economic decision rule
If marginal benefit exceeds marginal cost do it
Sunk costs
Cost already payed that you cannot get back should not be factored into decision making
PPC
Is ended outward because of in reading opportunity costs
Efficient points of production
Use all resources and don’t waste anything
Inefficient point of production
Wasting resources
Trade
Even with trade we can never produce about the PPC production possibility curve
Capitalism
Individuals own properties of production
Two main roles of government
Actor and referee
Relationship between price and quantity demanded
Inverse
Shift in demand curve ?
Decrease or increase in demand