Econ Ch. 1-5

Economics is best defined as the study of how people, businesses, governments, and societies

the largest part of what the US produces today is ___________ such as ___________________

factors of production include

the opportunity cost of any action is

depicts the boundary between those combinations of goods and services that can be produced and those that cannot given the resources and current state of technology

Production efficiency is achieved when

moving along a PPF, marginal cost is

in order to societies to reap the gain from trade, it is necessary to

the "law of demand" refers to the fact that, all other things remaining the same, when the price of a good rises

when the price of a normal good falls, the substitution effect leads to ______________ in the quantity purchased and the income effect leads to ___________ in the quantity purchased

the "law of supply" refers to the fact that, all other things remaining the same, when the price of a good rises

an increase in the number of fast food restaurants

a shortage causes the

when demand decreases and supply does not change, the equilibrium price _________ and the equilibrium quantity ___________

elasticity generally measures the

if the demand for a good is elastic, when the price increases, the

producers' total revenue will increase if

the max. amount a person is willing to pay for one more unit of good

if someone pays $50 for a pair of shoes, and the actual price of the shoes is $30, their marginal benefit is

consumer surplus is the ______________ summed over the quantity bought

the producer surplus on a unit of a good is the

a price ceiling is a price

production efficiency

resources are ____________ when they are idle but could be working

resources are _____________ when they are assigned to tasks for which they are not the best match

goods and services produced at lowest possible cost in quantities that provide greatest benefits

development of new goods and of better ways of producing goods and services

growth of capital resources

activity a person can preform at a lower opportunity cost than anyone else

any arrangement that enables buyers and sellers to get info and do business with each other

the ratio of one price to another

a good that is used in conjunction with another good

demand decreases and income increases

demand increases as income increases

the price of the good x the quantity sold

method of estimating the price elasticity of demand by observing the change in total revenue that results from a change in the price

%age change in quantity demanded/%age change in price of a substitute or complement

%age change in quan demanded/%age change in income

relationship between the price of a good and the quan. demanded by a person

relationship between price of a good and quan. demanded by all buyers

excess of the benefit received from a good over the amount paid for it

decrease in total surplus that results from an inefficient level of production

tradeoff between efficiency and fairness

land earns

labor earns

capital earns

entreupenuership earns