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econ exam

Terms in this set (39)

the value of the next best alternative
opportunity cost
impact of one additional unit
marginal
other things being equal
ceteris paribus
economics of the firm/individual
microeconomics
desire, willingness, and ability
demand
inverse relationship between P & Q
law of demand
overhead expenses like rent
fixed costs
production possibilities frontier
guns and butter
land, labor, capital, entrepreneurship
factors of production
direct relationship between P & Q
law of supply
costs that vary with production levels
variable costs
quantities producers will bring to market at each and every market price
supply
chief problem of economics
scarcity
factors allocated by central committee
command economy
the measure of satisfaction
utility
the amount of satisfaction a person will receive from one additional unit is usually diminishing
true
chicken noodle soup could be a reasonable substitute for tomato soup
true
rather than a graph, a demand schedule is a table or chart showing prices and quantities
true
because it is a very steep curve, the demand for gasoline is inelastic with respect to price
true
even a small change in the price of table salt will lead to dramatic movement in sales
false
a shift to the left in supply is the same as increase in supply
false
a change in price always leads to a change in demand
false
ceteris paribus, change in market price leads to a change in the quantity supplied
true
profit is maximized for producers at the point where total product is at a maximum.
false
a new productivity enhancing technology will lead to a change in supply
true
one of the reasons demand curves have a downward slope is bc of the income effect that means consumers feel wealthier when prices are very low and they will buy more at every price.
true
marginal revenue for any product will be the same as the unit price
true
adding more units of labor will always lead to higher output
false
though we have a free market economy, the practice of tipping waiters is traditional
true
profit is maximized for producers at the point where total costs are at a minimum
false
butter could be considered a complement for bread
true
if the price of a product rises dramatically, there would be an increase in demand for a reasonable substitute
true
if the price of a product rises dramatically, there would be a decrease in demand for a complement
true
if a firm can adjust to new prices quickly, then supply would be elastic. if it would take producers a long time to gear up production, supply will be relatively inelastic.
true
the demand schedule is a table that includes the quantity demand for a product at different price levels
true
production possibilities...
frontier
the total value of c
8000
opportunity cost of choosing c
16000
explain x
low working morale or people skipping work
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