Change in Quantity Supplied
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When we move along a supply curve, from one point to another caused by
the change in the price of a (final) good (movement along a supply curve)
Voluntary Exchange
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Trading, buying, selling
,Supply Curve
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The graphical relationship of the supply schedule (price is on the vertical axis
and quantity is on the horizontal axis)
Economic Growth
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An outward shift of the PPC caused by increase in technology, capital
investment, more natural resources, more/better labor, less institutional
constraints (taxes or laws)
Market Economy
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Demand and supply determine prices:
i. Prices and quantities set in relatively free markets
ii. Institutions (laws) protect private property and enforce contracts
iii. Very decentralized
iv. Profit incentives lead to higher productivity
(i.e United States)
, Private Costs/Benefits
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Costs/Benefits borne solely by the individuals who incur them (also called
internal costs/benefits)
Macroeconomics
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The study of the behavior of the economy as a whole (i.e unemployment rate,
rate of growth in the money supply (inflation), government's budget deficit)
Price Ceiling
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A legal maximum price; a price ceiling is binding if the ceiling is below the
equilibrium price; typically meant to help. Binding price ceilings may cause
shortages and black markets (i.e. price gauging after natural disasters, drugs,
human organs, payoffs, bribes to landlords under rent control).
Price Floor
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When we move along a supply curve, from one point to another caused by
the change in the price of a (final) good (movement along a supply curve)
Voluntary Exchange
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Trading, buying, selling
,Supply Curve
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The graphical relationship of the supply schedule (price is on the vertical axis
and quantity is on the horizontal axis)
Economic Growth
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An outward shift of the PPC caused by increase in technology, capital
investment, more natural resources, more/better labor, less institutional
constraints (taxes or laws)
Market Economy
Give this one a try later!
Demand and supply determine prices:
i. Prices and quantities set in relatively free markets
ii. Institutions (laws) protect private property and enforce contracts
iii. Very decentralized
iv. Profit incentives lead to higher productivity
(i.e United States)
, Private Costs/Benefits
Give this one a try later!
Costs/Benefits borne solely by the individuals who incur them (also called
internal costs/benefits)
Macroeconomics
Give this one a try later!
The study of the behavior of the economy as a whole (i.e unemployment rate,
rate of growth in the money supply (inflation), government's budget deficit)
Price Ceiling
Give this one a try later!
A legal maximum price; a price ceiling is binding if the ceiling is below the
equilibrium price; typically meant to help. Binding price ceilings may cause
shortages and black markets (i.e. price gauging after natural disasters, drugs,
human organs, payoffs, bribes to landlords under rent control).
Price Floor
