ECON 101- Final Exam Guide - Comprehensive Notes for the exam ( 63 pages long!)
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14: slope = opportunity cost, 8 pineapples: 14 coconuts, 8/14 pineapples: 1 coconut, 4/7 pineapples: 1 coconut, 4/7 = slope. 6: 9 pineapples: 6 coconuts, 9/6 pineapples: 1 coconut, 3/2 pineapples: 1 coconut, 3/2 = slope, absolute advantage: ability to produce a good using fewer inputs, from example #2, hayden has absolute advantage in pineapples. Jake has absolute advantage in coconuts: comparative advantage: ability to produce a good at a lower opportunity cost, from example #2, hayden has the comparative advantage in pineapples. Economy wide ppf: from example #2. Ha(cid:455)de(cid:374) (cid:862)swit(cid:272)hes(cid:863) first (cid:271)e(cid:272)ause of lower opportu(cid:374)it(cid:455) (cid:272)ost. *people switch in order of decreasing opportunity cost. 4: each country has 100 million workers. 4: switch from grain to cars, us switches first. Export: good produced domestically and sold abroad. If price increases, demand falls: demand schedule, gwyn. 25: sliding along the demand curve, when prices changes, slide along line on graph, shift of demand curve, example, normal good, example #2) substitute.
