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Terms in this set (126)
What are the 5 foundations of economics?
3. Opportunity Cost
4. Marginal Thinking
refers to the situation where an individual, business, or country can produce at a lower opportunity cost than a competitor can
What are the 6 roles of government in economics?
1. establish legal framework
2. maintain competition
3. provide public goods and services
4. correct for externalities
5. stabilize the economy
6. redistribute income
all other things being equal, the quantity supplied of a good rises when the price of the good rises, and falls when the price of the good falls
law of supply
all other things being equal, quantity demanded falls when prices rise, and rises when prices fall
law of demand
What could cause a shift in supply to the right?
the cost of an input falls; business taxes decrease or subsidies increase; the number of sellers increases; the price of the product is expected to fall in the future; the business deploys more efficient technology
What could cause a shift in supply to the left?
the cost of an input rises; business taxes increase or subsidies decrease; the number of sellers decreases; the price of the product is anticipated to rise in the future
What would cause a movement along the supply curve?
a price change
What could cause a shift in demand to the right?
income rises (demand for normal good); income falls (demand for an inferior good); the price of a substitute good rises; the price of a complementary good falls; the good is currently in style; there is a belief that the future price of the good will rise; the number of buyers in the market increases
What could cause a shift in demand to the left?
income falls (demand for a normal goods); income rises (demand for an inferior good); the price of a substitute good falls; the price of a complementary good rises; the good falls out of style; there is a belief that the future price of the good will decline; the number of buyers in the market falls
What would cause a movement along the demand curve?
a price change
cost or benefit that affect a party who did not choose to be part of the transaction; increased productivity
cost or benefit that affect a party who did not choose to be part of the transaction; pollution, traffice, litter
per capita GDP measures it
standard of living
Significant practice, relationship, or organization
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