Exam 1 Study Guide

Exam 1 Study Guide - A bsolute Advantage the ability to...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Absolute Advantage - the ability to produce a good using fewer inputs than another producer; measured in terms of the inputs required to produce it (not necessary for comparative advantage) Budget Constraint - slope; the limit on the consumption bundles that a consumer can afford Change in Supply - when a non-price determinant of supply changes (like technology or costs) Comparative Advantage - the ability to produce a good at a lower opportunity cost than another producer Competitive Market - many buyers/sellers, has a negligible effect on price Complements - if an increase in the price of one good causes a fall in demand for the other (college tuition and textbooks, bagels and cream cheese) Consumption Bundle - a particular combination of the goods (40 fish, 300 mangos) Cross-Price Elasticity of Demand - % change in Qd for good 1/% change in price for good 2; measures the response of demand for one good to changes in the price of another D-Curve - when vertical, elasticity =0; when relatively steep, elasticity < 1; when intermediately steep, elasticity=1; when relatively flat, elasticity > 1; when horizontal, elasticity is infinity Demand Schedule - a table that shows the relationship between the price of a good and the qty demanded Economics - the study of how society manages its scarce resources Efficiency - when society gets the most of its scarce resources Elasticity - A measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants Equality - when prosperity is distributed uniformly among society’s members Equilibrium Price - the price that equates qty supplied with qty demanded (price at which where the supply and demand lines cross) Equilibrium Quantity - the qty supplied and qty demanded at the
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/27/2011 for the course ECON 101 taught by Professor Gottlieb during the Spring '08 term at Rutgers.

Page1 / 4

Exam 1 Study Guide - A bsolute Advantage the ability to...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online