Economics - Microeconomics

These flashcards are the first 6 weeks in a 12 week introduction to economics. 

20 cards   |   Total Attempts: 182
  

Cards In This Set

Front Back
Define Scarcity
Humans have unlimted wants and limited means and resources in which to fullfill these wants.
How do Macro and Micro Economics Vary?
Macro economics is ocncerned with the economy as a whole where as miroeconomics is concerned with the individual parts of the economy.
What is oppitunity cost?
The cost of any activity measured in terms of the best alternative forgone.
Why are economics models used?
They are used as a visual representation of two variables, in order to understand complex problems. Are only relavant when ceteris paribus.
Why isnt the prodction possibility curve a straight line?
Because all resources arent directly transferrable.
What are some likely causes of an Increase in the production possibiltiy curve?
This could be due to an investment in a new plant, discovery of new raw materials, education, and technological advances.
How is a rational choice made?
When a person weighs up the marginal benifits of each activity against its marginal opportunity costs. If the marginal benifit exceeds the marginal cost it is a rational choice.
How do economic Systems Vary?
Economic systems vary depending on the extent of government control over the distribution of resources.
Which Economic System shows the least and most amount of control
Planned Economies - Most
Free Market - Least, decisions made by supply and demand.
State the Law of Demand
When the price of goods rise the demand for those goods will fall.
What causes a movement in the Demand Curve?
Tastes, Complimentary Products, Income, Income Distribution and Expectations of Change
In which direction does the demand curve slope and how does this vary depending on price elasticity?
A demand curve is always negativley sloped, the more inelastic a good is the steeper the curve.
A change in price causes a .........demanded
A change in the quantity demanded
Which direction will the demand curve move if the price of competing products increases
To the right as demand has increased
Which direction willl the supply curve move if there is a technological advance?
To the right as supply has increased with no price increase.