Cheatography
https://cheatography.com
everything u need for a 100
Opportunity Cost
The loss of other potential benefits when undertaking a specific business decision. |
Example
Paulastan is at an absolute advantage for both cars and planes since it can produce a larger quantity of both.
Jacobland is at a comparative advantage for producing cars because they give up only 1/3 of a plane per car, whereas Paulastan gives up 1 whole plane per car.
Law of Demand
Price goes down, quantity demanded increases. Price goes up, quantity demanded decreases. |
Why is the demand curve downward sloping?
Subsitution Effect |
Income Effect |
Law of Diminisihing Marginal Utility |
Changes in price motivate consumers to buy cheaper substitute products. |
When price goes down, people buy more of a product because their purchasing power has increased; vice versa. |
As you continue to consume a given product, you will have less satisfaction the more you have. |
Why is the demand curve downward sloping?
Subsitution Effect |
Income Effect |
Law of Diminisihing Marginal Utility |
Changes in price motivate consumers to buy cheaper substitute products. |
When price goes down, people buy more of a product because their purchasing power has increased; vice versa. |
As you continue to consume a given product, you will have less satisfaction the more you have. |
|
|
Demand Curve Decrease = Left
5 Shifters of Demand
1. Tastes/Preferences
2. Number of Consumers
3. Price of Related Goods
4. Income
5. Expectations |
Change in Demand = Rightward Shift
Change in Quantity Demanded = Downward
Law of Supply
There is a direct relationship between price and quantity supplied, so if price goes up for milk, quantity produced will increase. |
5 Shifters of Supply
1. Price of Resources
2. Number of Producers
3. Technolog
4. Taxes and Subsidies
5. Expectations |
Mnemonic
Supply goes to the sky, demand to the dirt. |
|
|
|
Created By
Metadata
Comments
No comments yet. Add yours below!
Add a Comment
Related Cheat Sheets
More Cheat Sheets by haniyashariqkhan