1st exam study guide
Popular in Economics
Popular in Economic Sciences
This 2 page Study Guide was uploaded by Alex Payton on Wednesday February 11, 2015. The Study Guide belongs to 101 at a university taught by Spangler in Fall. Since its upload, it has received 188 views.
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Date Created: 02/11/15
Opportunity cost what you give up in order to get something else EX You are a hunter and gatherer You can hunt and kill one small animal every hour but if you choose to get berries you can gather a pound of berries Suppose you hunt or gather for 8 hours 9am 5pm What is the opportunity cost of killing one small animal Answer on next page Labor mental and physical abilities of workforce Physical capital manufactured items used to produce other goods and services Human capital educational achievements and skills of labor force Comparative advantage makes sense to produce things you39re especially good at producing and buy products you39re not good at producing Competitive market many buyers and sellers of same good or service none of whom can in uence price Change in demand is when the demand curve moves Change in quantity demanded is a shift among the demand curve Substitutes decrease in price of one good leads to decrease in demand for other Complements decrease in price of one good leads to increase of demand for other Normal good demand increases when income increases and vice versa Inferior good demand decreases when income increases EX Rich businessmen won39t go to McDonald39s because they can order steak Increase in supply is a rightward shift of supply curve Decrease in supply leads to a leftward shift of the supply curve Surplus quantity supplied gt quantity demanded Shortage quantity demanded gt quantity supplied Price and quantity move together gt demand change Price and quantity move opposite directions gt supply change Consumer surplus difference between market price and what consumers would be willing to pay Producer surplus difference between market price and price at which being sold Quota upper limit set by government on quantity of some good that can be bought or sold License right to supply a good wedge difference between demand price and supply price at quota limit elastic increase price reduces quantity demanded inelastic same increase in price reduces quantity demanded just a little elasticity DOESN39T EQUAL slope Opportunity cost example 1 pound of berries You are giVing up one pound of berries so that you can kill 1 small animal FOR ALL EQUATIONS TAKE A LOOK AT MY LAST SET OF NOTES
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