Principles of Economics Production Economic Performance 1 Economic Performance 2 International Trade $100 $200 $300 $400 $500 $100 $200 $300 $400 $500 $300 $400 $500 Supply and Demand

_______ is the cost of what you give up to obtain an item.

Opportunity Cost

________ is the cost you can never recover no matter

Sunk cost

________ is the small or incremental amount you would pay extra to have more

Marginal Cost

Humankind has unlimited wants but our resources are limited thus creating the problem of ________

Scarcity

___= revenue – cost of production

Profit

A ____ is anything an individual wants more of at zero price.

Good

Copper and iron are ______ natural resources.

Exhaustible

_____ is the study of how a society manages its scarce resources.

Economics

When you _______ in something, it means you focus on one task enabling you to be more efficient and productive.

Specialize

All factors of production are called ________

Capital resources or capital goods

Demand for a good exists only when consumers are both _____ and ____ to buy it

Willing and able

If elasticity is greater than 1.0, demand is ______.

Elastic

As substitutes become cheaper, demand for the normal good will _____

Decrease

_____ goods are goods that go together and usually sold together.

Complementary goods

A ______ exists when quantity demanded is lower than quantity supplied.

Surplus

When firms get together to fix prices and quantity it is called

Cartel

A profit-seeking individual who accepts all risk of success or failure in business

Entrepreneur

When 1 person or 1 group holds all market power in an industry

Monopoly

Who pays more taxes- a sole proprietor or a corporation?

Corporation

Legal obligation of a firm to pay off all debts

Liability

Which type of spending makes up 60% or more of our nation’s spending?

Consumption

Which type of GDP takes inflation into account- real or nominal?

Real

I’m thinking of a # What is it?

8

What are the 2 phases of a business cycle?

Expansion and recession

Which type of unemployment is caused by recession?

Cyclical

A point of reference to measure inflation

Consumer price index

_______ are taxes countries place on imported goods.

Tariffs

_______ is a free trade agreement among US, Mexico, and Canada

NAFTA

The ______ theory states that developing countries will eventually catch up with the industrialized countries.

Convergence Theory

Crude oil makes up ___% of our nation’s imports.

17%

Make your wager Ms. So’s husband

In which city did the Rock play college football?

Miami