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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.
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.
Analyze a PPC showing trade-offs between consumer and capital goods.
Movement along the PPC shows the opportunity cost of producing more of one type of good versus the other.
Analyze a supply and demand graph showing a surplus.
Surplus indicates that the price is above equilibrium, leading to excess supply.
Analyze a supply and demand graph showing a shortage.
Shortage indicates that the price is below equilibrium, leading to excess demand.
What does a point inside the PPC indicate?
Inefficient use of resources or unemployment.
What does a point outside the PPC indicate?
Currently unattainable with existing resources and technology.
How does a shift in the demand curve affect equilibrium price and quantity?
A rightward shift increases both equilibrium price and quantity; a leftward shift decreases both.
How does a shift in the supply curve affect equilibrium price and quantity?
A rightward shift decreases equilibrium price and increases quantity; a leftward shift increases price and decreases quantity.
What does a bowed-out PPC indicate?
Increasing opportunity costs as production shifts from one good to another.
What does a straight-line PPC indicate?
Constant opportunity costs as production shifts from one good to another.
How does technological advancement affect the PPC?
It shifts the PPC outward, allowing for greater production of both goods.