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Why does scarcity exist?
What is included in the study of microeconomics?
How do economists define opportunity cost?
What do economists call the additional benefit of increasing some activity by one unit?
How do economists classify items bought by individuals to provide personal enjoyment?
To what does the term ‘capital’, as a factor of production, refer?
To what does the phrase ‘human capital’ refer?
What two groups of decision makers are represented in the basic circular flow model?
In the circular flow model, in what direction do the various things shown in the model flow?
What does the production possibilities frontier illustrate?
What is true of all the points on the PPF?
How is the shape of the PPF related to the idea of increasing opportunity cost?
How is the shape of the PPF related to the idea of increasing opportunity cost?
What is the opportunity cost of economic growth?
4. How is the shape of a typical production possibilities frontier related to the opportunity cost of producing a good?
How do economists define comparative advantage?
What do economists mean by the phrase ‘quantity demanded’?
How is the price of a substitute related to the demand for a good?
How is the price of a complement related to the demand for a good?
Complement Good
Substitute Good
What is the law of supply?
What things will increase the supply of a product?
How is the cost of producing a product related to the supply of that product?
What has to be true for market equilibrium to occur?
What happens in a competitive market when there is a surplus of the product?
What situation develops if the price of a product is below the equilibrium price?
What does the price elasticity of demand measure?
When a firm raises the price of its product, what happens to its total revenue?
What formula do we use to calculate the price elasticity of demand?
Percentage Changes
What does the price elasticity of supply measure?
What does the supply curve look like when supply is perfectly inelastic?
What does cross elasticity of demand measure?
If a product is a normal good, what can we say about its income elasticity of demand?
If the cross elasticity of demand is negative, what can we say about the goods involved?
Coffee at a coffee shop is allocated to individuals in society through what type of method?
When do we know that allocative efficiency has been achieved in the production of a good?
How is the principle of decreasing marginal benefit related to the shape of the marginal benefit curve?
To an economist, what does the word ‘value’ refer to?
What do we call the difference between the marginal benefit from a good and the price of the good?
To an economist, what is the difference between the terms ‘cost’ and ‘price’?
If marginal benefit is equal to marginal cost, then what can we say about producer and consumer surplus?
What do economists mean by the big tradeoff’?
How is producer surplus shown graphically?
What does a budget line show
What happens to the budget line if a consumer's budget increases
If one of the products a consumer buys rises in price, what happens to the consumer's budget line?
To what does the phrase ‘relative price’ refer?
To what does the term ‘utility’ refer?
How can we use marginal utility theory to find the demand curve?
How do we calculate marginal utility per dollar?
To what does the phrase ‘marginal utility’ refer?
What is the solution to the paradox of value?
