Y11 Market Equilibrium Flashcards

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Scarcity

Back

The condition in which available resources are limited and not enough to produce everything that human beings need and want.

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For Whom to Produce

Back

Refers to the choice made in response to the question of income or wealth distribution among a population.

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Efficient production on the PPC

Back

Points on the PPC curve represent efficient production levels where resources are fully utilized.

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Inefficient production on the PPC

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Points inside the PPC curve indicate inefficient production where resources are not fully utilized.

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Economic growth and the PPC

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Economic growth can shift the PPC outward, indicating an increase in an economy's capacity to produce.

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Diagram of a firm increasing strawberry production by 1,000 kg

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Opportunity cost is the loss of potential gain from other alternatives when one alternative is chosen.

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Resource quality

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Improvements in resource quality can lead to economic growth.

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Definition of Demand

Back

The various quantities of a good (or service) an individual consumer is willing and able to buy at different possible prices during a particular time period, ceteris paribus.

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Supply

Back

The various quantities of a good (or service) a firm is willing and able to produce and supply to the market for sale at different possible prices, during a particular time period, ceteris paribus.

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Change in quantity supplied

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Any change that increases or decreases the quantity supplied at a given price. Only caused by a change in the price and leads to a movement along the supply curve.