econ final exam 2026

what is the purpose of PPF graphs

measure opportunity costs of shifts in production

why would the government make a price ceiling

to control prices, keeping it from becoming unaffordable

what effect does a price ceiling have on supply and demand

a shortage

what does scarcity force people to do

make choices

how is scarcity reflected in prices

higher scarcity, higher price

if demand increases, what will suppliers do to their prices

prices will increase

supply and demand interact to determine what

price and quantity

in order to make a profit, a selling price has to be higher than what

the production cost

what function does price have in a market

balances supply and demand

what is the governments role in a market economy

protect property rights

what is the main goal of an entrepreneur

make profit

what is an opportunity cost

second best option not chosen

what are the factors of production

land, capital, labor, entertainment

when will people buy substitute goods

when the first choice is too expensive or sold out

what effect will an increase in income have on a demand curve

shift right

in order to increase demand, what two conditions must be present

customers have to be willing and able to buy

what effect do natural disasters have on prices of goods

increase in prices

what is the law of demand

as price increases, quantity demanded decreases

what is the law of supply

an increase in the price, an increase in quantity

what are progressive taxes

as income grows, it moves the payer into higher percentage bracket