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value/idea/assumption
express an opinion about what ought to be |
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fact
objective statements that can be tested or rejected |
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| increase in income = increase in demand |
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| w.e must be given up to obtain some item |
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| measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants |
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quantity demanded exceeds quantity supplied
price ceiling causes shortages |
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Term
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Definition
demand curve: Any change that reduces the quantity demanded at every price shifts the demand curve to the left and is called a decrease in demand.
change that increases quantity demanded at every price shifts demand curve to the right and is an increase in demand
supply curve: Any change that raises quantity supplied at every price, such as a fall in the price of sugar, shifts the supply curve to the right and is called an increase in supply. Similarly, any change that reduces the quantity supplied at every price shifts the supply curve to the left and is called a decrease in supply. |
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demand increases when income falls
ex, bus rides |
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Definition
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Definition
| demand curve shifts RIGHT |
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Definition
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| supply curve shifts RIGHT |
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Term
| movement along supply curve caused by |
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Definition
| change in actual good's price |
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| shift along supply curve caused by |
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Definition
| change in other variables affecting good, like input prices, technology, expectations, # of sellers |
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Term
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Definition
| two goods where decrease in price of one good = increase in demand for other good |
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Term
| production possibilities frontier |
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Definition
| a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology |
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Term
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Definition
| max benefits from scarce resources |
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