Econ 101: Introduction to Microeconomics

Flashcards summarizing key concepts from the Microeconomics lecture notes.

Trade

The action of buying and selling goods and services.

Comparative Advantage (CA)

The ability to produce a good at a lower opportunity cost than another producer.

Absolute Advantage

The ability of a party to produce more of a good or service with the same amount of resources than another party.

Opportunity Cost (OC)

The loss of potential gain from other alternatives when one alternative is chosen.

Market

An institution or mechanism that allows buyers and sellers to interact and make exchanges.

Demand

The quantity of a good that consumers are willing and able to purchase at various prices.

Law of Demand

The principle that as the price of a good rises, the quantity demanded decreases, and vice versa.

Supply

The quantity of a good that producers are willing and able to sell at various prices.

Law of Supply

The principle that as the price of a good rises, the quantity supplied increases, and vice versa.

Equilibrium

The point where the quantity demanded equals the quantity supplied, resulting in no surplus or shortage.

Determinants of Demand

Factors that cause the demand curve to shift, including income, preferences, and number of consumers.

Determinants of Supply

Factors that cause the supply curve to shift, including input prices, technology, and number of producers.

Comparative Static

A method of analyzing market impact by examining changes in supply and demand.