All Flashcards
How does scarcity apply to time management?
Time is a limited resource, so we must make choices about how to allocate it.
How does opportunity cost apply to choosing between college and a job?
The opportunity cost of college is the income you could have earned from a job.
How does comparative advantage explain international trade?
Countries specialize in producing goods where they have a comparative advantage and trade with others.
How does increased demand for electric cars affect equilibrium?
Increased demand leads to a higher equilibrium price and quantity of electric cars.
How does scarcity affect a consumer's decision to buy a new phone?
Scarcity of income forces the consumer to consider the opportunity cost of buying the phone.
How does opportunity cost relate to government spending decisions?
Every government spending decision involves an opportunity cost of what else could have been funded.
How does comparative advantage influence career choices?
Individuals often pursue careers where they have a comparative advantage, maximizing their potential earnings.
How does supply and demand affect the price of concert tickets?
High demand and limited supply can drive up the price of concert tickets.
How does equilibrium relate to housing prices?
Equilibrium in the housing market determines the price and quantity of houses sold.
Explain how scarcity affects healthcare resource allocation.
Due to limited resources, healthcare systems must make choices about which treatments and services to provide.
How does scarcity apply to deciding what to eat for lunch?
Limited money and time mean choosing one lunch option means giving up others; opportunity cost is the next best meal.
How does opportunity cost apply to attending college?
The opportunity cost includes tuition, fees, and forgone wages from not working full-time.
How does comparative advantage apply to international trade?
Countries specialize in producing goods where they have a lower opportunity cost and trade with others, increasing overall consumption.
How does marginal analysis apply to deciding how much to study?
Continue studying as long as the marginal benefit (improved grade) exceeds the marginal cost (time spent, fatigue).
How does marginal utility apply to eating pizza?
Each slice provides less satisfaction than the previous one; stop eating when the marginal utility is less than the marginal cost (feeling full).
How does scarcity affect a government's budget decisions?
Limited tax revenue forces governments to prioritize spending on programs like education, healthcare, or defense, each with an opportunity cost.
How does opportunity cost relate to starting a business?
Besides financial investment, the opportunity cost includes the salary forgone from not pursuing alternative employment.
How does comparative advantage influence career choices?
Individuals often specialize in jobs where their skills have a lower opportunity cost compared to others.
How does marginal analysis affect a firm's production decisions?
Firms increase production as long as marginal revenue exceeds marginal cost, maximizing profit where MR=MC.
How does marginal utility guide consumer spending?
Consumers allocate their budget to maximize overall satisfaction, buying goods until the marginal utility per dollar is equal across all goods.
What are the differences between absolute and comparative advantage?
Absolute advantage is producing more with the same resources; comparative advantage is producing at a lower opportunity cost.
Differentiate between a change in demand and a change in quantity demanded.
Change in demand is a shift of the entire curve; change in quantity demanded is a movement along the curve due to a price change.
Differentiate between a change in supply and a change in quantity supplied.
Change in supply is a shift of the entire curve; change in quantity supplied is a movement along the curve due to a price change.
What is the difference between microeconomics and macroeconomics?
Microeconomics studies individual decisions; macroeconomics studies the economy as a whole.
What is the difference between positive and normative economics?
Positive economics is objective and fact-based; normative economics is subjective and value-based.
Compare and contrast a market economy and a command economy.
Market economy relies on supply and demand; command economy relies on central planning.
What are the differences between short-run and long-run in economics?
Short-run has fixed factors of production; long-run allows all factors to vary.
Compare and contrast efficiency and equity in economics.
Efficiency is optimal resource allocation; equity is fairness in distribution.
What is the difference between consumer goods and capital goods?
Consumer goods satisfy immediate wants; capital goods are used to produce other goods.
Compare and contrast economic growth and economic development.
Economic growth is an increase in output; economic development is broader improvement in living standards.