Economics Final Notes

Scarcity

The condition where unlimited wants exceed limited resources.

Trade-offs

Choosing one option over another due to scarcity.

Opportunity Cost

The value of the next best alternative foregone.

Law of Demand

As the price of a good decreases, the quantity demanded increases (and vice versa).

Law of Supply

As the price of a good increases, the quantity supplied increases (and vice versa).

Demand Schedule

Table showing the quantity demanded at various prices.

Supply Schedule

Table showing the quantity supplied at various prices.

Equilibrium Price

The price at which quantity demanded equals quantity supplied.

Shifts in Demand

Changes in demand due to factors like income, consumer preferences, and population changes.

Shifts in Supply

Changes in supply due to factors like cost of production and technology.

Elasticity

Measure of responsiveness of quantity demanded/supplied to price changes.

Traditional Economy

Economy where decisions are based on customs, traditions, and beliefs.

Command Economy

Economic system where the government makes all economic decisions.

Market Economy

Economy driven by consumers and producers with little government intervention.

Mixed Economy

Combination of market and government intervention in economic decision-making.

Perfect Competition

Market structure with many sellers, identical products, and easy entry/exit.

Monopolistic Competition

Market structure with many sellers and differentiated products, relatively easy entry.

Oligopoly

Market structure where few sellers dominate, products may be identical or different.

Monopoly

Market structure with a single seller, no close substitutes, and high barriers to entry.