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Macroeconomics Ch. 2
Terms in this set (10)
Uses fewer resources to produce it
Has a lower opportunity cost of production
Trade depends on...
Comparative advantage (differences in opportunity costs)
What determines price?
"price theory"/price determination
buyers- overall relationship between the price of a good and the amount of a good people are will to buy
Law of Demand
an inverse relationship between the price of a good and the quantity demanded of a good
sellers- overall relationship between the price of a good and the amount people are willing and able to sell
Law of Supply
a direct relationship between price and the quantity supplied
an equilibrium is a position at rest- unless something else changes "all else equal" the market will stay at that price and quantity
In a competitive market a surplus will..
reduce the price
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