Studied by 4 people
Choices
needed due to scarcity
Opportunity cost
MOST IMPORTANT loss when making a decision
Trade offs
ALL the things you’re losing from making a specific choice
Price
How much the BUYER pays
Cost
How much a PRODUCER pays to create a good
Normative economic statements
NON facts, speculative statements
Positive economic statements
FACT statements
Consumer Goods
Goods that are produced for a buyer (IE sandwich)
Capital Goods
Goods used to produce other goods (IE panini press for making Paninis)
Allocative efficiency
Efficently making “what the people” want
Productive efficiency
Making the max amount of products
Law of increasing opportunity cost
When the opportunity cost increases with every good you increase the production of.
absolute advantage
producing more of a good (period.)
Comparative advantage
having a lower opportunity cost for producing the same amount of goods
Resource market
Market for companies to buy goods (amazon)
Product markets
For consumers to buy from (target)
Output method
Output other over
input method
input other under
Shifters of the PPC
Change in resource quantity or quality, change in technology, change in trade
Free market example
US
centrally planned market example
North Korea
Note
Flashcard