Review Sheet - Exam 1

Review Sheet - Exam 1 - Economics 105 Review Sheet First...

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Economics 105 Review Sheet First Exam – Wednesday, Sept. 12 th Chapter 1 Scarcity and choice – Theories, principles and models – Individual’s economizing problem - The need to make choices because economics wants exceed economic means Society’s economizing problem - Factors of production - Economic resources: land, capital, labor and entrepreneurial ability Opportunity cost - The amount of other products that must be forgone or sacrificed to produce a unit of product. Law of increasing opportunity cost - The principle that as the production of a good increases, the opportunity cost of producing an additional unit rises. Production of possibilities schedule (table) - Production of possibilities curve - A curve showing the different combinations of two goods or services that can be produced in a full-employment, full-production economy where available supplies of resources and technology are fixed. Appendix - What is a graph? - - Slope of a straight line – - Direct Relationship - The relationship between two variables that change in the same direction, for the example, product price and quantity supplied; positive relationship. Inverse relationship
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This note was uploaded on 04/02/2008 for the course ECON 105 taught by Professor Binder,m. during the Spring '08 term at New Mexico.

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Review Sheet - Exam 1 - Economics 105 Review Sheet First...

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