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EC 201 Exam 1
Terms in this set (53)
The limited nature of society's resources
the study of how society manages its scarce resources
the property of society getting the most it can from its scarce resources.
the property of distributing economic prosperity uniformly among the members of society.
whatever must be given up to obtain some item
people who systematically and purposefully do the best they can to achieve their objectives.
a small incremental adjustment to a plan of action
something that induces a person to act
an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.
the ability of an individual to own and exercise control over scarce resources.
a situation in which a market left on its own fails to allocate resources efficiently.
the impact of one person's actions on the well-being of a bystander.
the ability of a single economic actor to have a substantial influence on market prices.
the quantity of goods and services produced from each unit of labor input.
an increase in the overall level of prices in the economy
fluctuations in economic activity, such as employment and production.
production possibility frontier
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology.
the study of how households and firms make decisions and how they interact in markets.
the study of economy wide, phenomena, including inflation, unemployment, and economic growth.
claims that attempt to describe the world as it is.
claims that attempt to prescribe how the world should be.
a group of buyers and sellers of a particular good or service
a market in which there are many buyers and many seller so that each has a negligible impact on the market price.
the amount of a food that buyers are willing and able to purchase
law of demand
the claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.
a table that sows the relationship between the price of a good and the quantity demanded.
What are the main variables that can shift the demand curve?
income, prices of related goods, tastes, expectations, number of buyers.
a good for which, other things equal, an increase in income leads to an increase in demand.
a good for which, other things equal, an increase in income leads to a decrease in demand.
two goods for which an increase in the price of one leads to an increase in the demand for the other. Lemon lime and mtn. Dew
two goods for which an increase in the price of one leads to a decrease in the demand for the other. Chips and lemon lime soda
An increase in price of a good will ________ the demand of the product
Decrease. No shift. Movement along line.
The ability to produce a good using fewer inputs than another producer.
The ability to produce a good at a lower opportunity cost than another producer.
Goods produced abroad and sold domestically
Goods produced domestically and sold abroad
The amount of a good that sellers are willing and able to sell.
Law of supply
The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises.
A table that shows the relationship between the price of the food and the quantity supplied.
A graph of the relationship between the price of a good and the quantity supplied.
A situation in which the market price has reached the level at which quantity supplied equals quantity demanded
The price that balances quantity supplied and quantity demanded.
The quantity supplied and the quantity demanded at the equilibrium price.
A situation in which quantity supplied is greater than quantity demanded.
A situation in which quantity demanded is greater than quantity supplied.
Law of supply and demand
The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.
a measure of the responsiveness of quantity supplied to a change in one of its determinants.
Price elasticity of demand
a measure of how much quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price.
the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold.
income elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in consumers' income, computed as the percentage change in quantity demanded divided by the percentage change in income.
cross-price elasticity of Demand
a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good.
Price elasticity of supply
a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price.
Elastic demand curves- total revenue moves in the opposite direction as the price.
THIS SET IS OFTEN IN FOLDERS WITH...
EC 201 EXAM 2
EC 201 Exam 1
EC 201 FINAL Exam
EC 201 Chapters 7-9
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