ECO 110 Midterm

What is this?

Excess supply creates what?

The scientific study of "what is" among economic relationships

Smallest dollar amount a seller would be willing and able to let the good go at

Who came up with absolute advantage?

When price is used to ration goods, people have a strong incentive to earn income in order to pay the required price

Focuses on large sectors of the economy as a whole (industries, country transactions)

A good for which demand increases following a rise in income, & demand falls after a decline in income

Who purchases resources and uses them to produce goods and services

What are pieces of a good?

Who came up with comparative advantage?

In production if it can use less labor to produce 1 unit of a good than its trading partner

Correlation does not equal causation???

A statistical association between two events does not imply that one event causes the other

What is this?

Focuses on narrowly defined unites (individual and firm level decision making)

Demand schedule is the quantity of a well-defined good that buyers are willing & able to purchase at a possible price

Occurs when a firm's revenues are greater than its costs

When price falls, the quantity demanded will increase, & when the price rises, the quantity demanded will decrease

The time, effort, and other resources needed to search out, negotiate, and consumate an exchange

What happens when the quantity demanded increases at every given price?

The difference between the lowest price a supplier will accept to produce a good and the price they actually accept

The largest dollar amount that the buyer is willing and able to pay for a good

Judgements about "what ought to be" in economics matters

Goods and services that are used together

The sum of a producer's costs of employing each resource required to produce a good or service

(The foundation of trade), goods move to individuals who value them more highly related to others

What is this?

Age, race, gender, religion, etc.

Whats true for one individual may not be true for the group

If a free economic market for a good is in equilibrium then which is not true?

In producing a good if its opportunity costs of producing that good are lower than its trading partner

Mercantilism died in 1800. End of Story.

_______ exists when there is less of a good freely available than people would like

There is a positive relationship between the price of a product and then amount of it that will be supplied by producer

A latin term meaning "other than constant" (all else equal)

Is a good something that creates value for someone?

Colonialism and rise of the nation state (economic rivalries between nations)

Commonly owned property will be poorly maintained and over-utilized rather than conserved for the future

A good for which demand falls following a rise in income, and demand rises after a decline in income

What is this?

The difference between the amount consumers are willing to pay and the amount they have to pay for a good

The height of a supply curve shows the minimum price a producer will supply, and the opportunity price of production

What makes us make choices and decisions based on the opportunity costs of goods?

Demand shortage creates what?

Is the quilibrium price when the demand and supply curves meet?

What includes the right to exclusive use of a property, legal protection, and right to sell or exchange property

The right to use, control, and obtain benefits from a resource, good, or service

What is this?

Goods that can be used for similar purposes