Economic questions and problems arise because?
Scarcity: Human wants exceed available resources
Incentives
Help us make choices, penalties, and rewards
Standard of living increases if...?
Productivity increases
Inflation is the measure of...?
The cost of living
Economic growth is..?
Changes in the long run standard of living
Ceteris Paribus Assumption
All other things remain the same
What are the 5 resources we use to produce?
Natural, Labor, Capital, Human Capital, & Entrepreneurship,
Circular Flow
Households, Labor Market, Business, and Goods Market
What is a PPF?
Production Possibilities Frontier: Simple model showing the production of goods
What are the 3 areas on a PPF graph?
Inefficient (inside), efficient (on the line), and unattainable
A shift right in the demand for Apple would be an ________ of Microsoft
Increase in the price
What factors shift the demand curve?
Substitutes, compliments, income, expectations of buyers, number of buyers, and preferences
What facts shift the supply curve?
Productivity, equipment, building, material and energy cost, expectations of sellers
Opposing forces in balance at equilibrium?
Supply and demand
Investment is defined as the purchase of...?
New capital goods
The purchase of stocks and bonds is..
Not included in the GDP