The production possibilities frontier assumes that the level of technologyvaries when applying the model.
The law of supply states that there is a negative relationship between priceand quantity demanded.
Demand is measured on the vertical axis and supply on the horizontalaxis.
Opportunity cost is the lowest valued benefit that must be sacrificed asthe result of choosing an alternative.
Joint output of individuals or nations will be maximized when goods are exchanged between parties in accordance with the law of "comparative advantage".
Excess demand in the market will cause the price of a product to decline.
A supply curve is negatively sloped, while a demand curve is positively sloped. If given a graph of them both, that will be evidenced by computingeach curve's X axis divided by its Y axis when devising a 90-degree angle.
A point inside the production possibilities frontier represents an economythat is utilizing resources efficiently.
A change in quantity demanded is a movement along the same demandcurve.
For economies that rely on decentralized decision making, the most important decisions are made by the government.
The smaller percentage of one's net budget one has to allocate moneyto a particular product, the more price inelastic will be the demandfor that product.
Government actions, such as price floors and ceilings, can actually reduce employment and raise market inefficiency
In the circular flow model, firms own economic resources, and householdsbuy the manufactured products and services.
Households play a dual role of providing the factors of production whilepurchasing the goods and services of firms.
Equilibrium is a state of balance between supply and demand.
In the production possibilities frontier, a nation's boundary will shift inward if they export more than they import, likely leading to inflationarypressures in the economy.
An increase in consumer income will affect the supply of any given product.
As globalization and world trade proliferates, individual markets withincountries' economies become more competitive.
"As the price of gasoline rises, consumer demand decreases. In addition,the quantity demanded of compact cars increased, causing their priceto rise." This statement contains two errors: demand and quantitydemanded are confused twice.
If the spot oil price in petroleum markets is rising, then we can expect thesupply curves of products using petroleum as an input to shift rightward.
A substitute good is a determinant of supply.
The law of demand states that there is a direct relationship betweensupply and demand.
The "Law of diminishing returns" states that as any activity is extended,it eventually becomes increasingly easier to pursue the activity further.
Antiques would tend to have highly price inelastic supply curves.
"The big corporations in this country, like ExxonMobil and GM, havedeep pockets and need to be hiring more people." This isa positive statement about economic policy.
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