UB ENG 101 - final review (7 pages)

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final review



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final review

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Pages:
7
School:
University at Buffalo-SUNY
Course:
Eng 101 - Writing 1

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Review Sheet Reread chapter 1 up to pg 11 as it is a good review Economics Study of how scarce resources are allocated among competing uses When making a decision we only consider the marginal cost of that decision not the sunk costs We will chose to do something as long as the marginal cost is less than the marginal benefit Opportunity Cost measures the best alternative forgone when making choices Economic reality is not only controlled by economic forces but by social and political forces as well Macroeconomics study of economic aggregates such as national production and the price level Microeconomics the study of the behavior of individual consumers and producers operating in the individual markets of the economy Production Possibilities Frontier Shows boundary between combination of goods an economy can produce and those it can not Shape of Curve 1 Negative slope to produce more of one good an economy must produce less of the other good if it is producing efficiently 2 Curved shape Opportunity cost of producing more of one good increases as you produce more of it because resources are specialized PPF will shift out if there are changes in either technology or available resources Absolute advantage is when a country produces a good using the minimum quantity of inputs Comparative Advantage the ability to be better suited to production of one good than to the production another good This happens when they can produce a good at the lowest opportunity cost Due to comparative advantage counties will tend to specialize in the production of goods over which they have comparative advantage All countries will benefit from trade Countries will trade even if one country has absolute advantage in all goods Although the U S has benefited greatly from globalization due to increased markets for their products and cheaper prices for all goods there have been some costs involved including losses in jobs and increased competition for domestic companies Role of Government The government plays a role whenever there are market failures ie the market does not provide the most efficient solution 1 correcting for externalities 2 reducing market power 3 proving public goods The operations of the economy can be depicted by the circular flow diagram which represents the three sectors of the economy households firms and the government that interact in the goods and factor markets Businesses can be sole proprietorships partnership or corporations depending on the amount of control and or liability they desire Households are both suppliers in the factor market and demanders in the goods market The Government plays both the role of actor by participating in the economy and refereed by setting rules and regulations Demand curve shows the quantities of a good a consumer is willing and able to buy at alternative prices given tastes incomes related prices and number of buyers Law of demand increase in price causes a decrease in quantity demand movement along the curve Change



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