Short Answer Flashcards
2.
Choices are nessecary because they pull a person in opposite directions. Both cannot be satisfied.
- Explain and
Because they pull people in opposite directions and cannot be satisfied.
- What is the difference between microeconomics and macroeconomics? Give examples of each.
Micro- choices made by individual units.
Macro- large scale economic choices.
- What character quality is essential for ten Christian to have victory over insatiability.
Contemptment
- What are the two purposes for economic models?
Instruction and prediction of future events
- For an economist, what is the primary value of a production possibilities curve?
A PPC enables the economist to see the maximum feasible amounts that a business can produce with its limited resource.
- Name the four factors of production or the four payments businesses make in exchange for the factors of production.
Land, labor, capital, entrepreneurship.
Rent, wages, interest, profit.
- Why is the financial market necessary for the effective functioning of a developed society?
Financial market takes the savings of households and channels them to businesses so that the financial capital can help business firms operate effectively.
- With what economic principle do we most often associate Ludwig vos Mises?
The free market
- Who identified the principle of diminishing marginal utility?
William Stanley Jevons
- State the law of demand
Everything else being held constant, the lower the price charged for a good or service, the greater the quantity people will demand and vice versa.
- When an individual makes a decision at the margin,
The individual chooses to obtain the amount at which the marginal benefit just offsets the marginal costs.
- What four conditions may change the demand for a product?
Change in people’s incomes
Change in price of related goods
Change in people’s tastes and preferences
Change in people’s expectations
- What are the three functions of prices?
Prices transmit info, provide incentives, and redistribute income.
- State the law of supply.
The higher the price the buyers are will
I got to pay, other things being constant, the greater the quantity a supplier will be willing to produce and the inverse is true.
- What occurs when the price of a product is higher than the price at which supply equals demand?
A surplus
- What is the simplest solution to a surplus?
The producer lowers the price until the he quantity demanded equals the quantity he has to supply.
- Which way does a supply curve slope and why?
Upward to the right, indicating that the greater the price buyers are willing to pay for the product, the greater quanity firms will be willing to supply.
- What three factors could lead to a change in supply?
Changes in technology,
Changes in production costs,
Changes in the prices of related goods.
1.
Economic cost is the value people place on a good or service and is reflected by its price.
The satisfaction a person gives up or the regretted experience by not choosing differently.
