ECON 1 flash cards
48 cards for Principles of Economics, laid out week by week and timed around your exams. Free on iPhone and the web.
Exam dates
Unblank times your reviews around these. You can always set your own dates in the app.
- FinalTue, Mar 16, 2027A sample date until the Registrar posts the real one
The first 20 cards
Read the question, think of your answer, then open the card.
Week 1 · Scarcity and opportunity costWhat is opportunity cost?Show the answerHide the answer
The value of the best alternative you give up when you make a choice.
Week 1 · Scarcity and opportunity costYou skip a $120 work shift to go to a free concert. What does the concert cost you?Show the answerHide the answer
$120, the wages from working, your best alternative use of that evening.
A ticket price of zero does not make a choice free; time has other uses.
Week 1 · Scarcity and opportunity costWhat does it mean to think at the margin?Show the answerHide the answer
Comparing the extra benefit of one more unit of an action with its extra cost.
A rational decision maker takes the next step only when its marginal benefit is at least its marginal cost.
Week 1 · Scarcity and opportunity costWhy should sunk costs not affect a decision?Show the answerHide the answer
They are already paid and can't be recovered, whichever option you pick next.
Week 1 · Scarcity and opportunity costWhy is a production possibilities frontier usually bowed outward?Show the answerHide the answer
Resources aren't equally suited to every good, so each extra unit of one good costs more and more of the other.
The frontier shows the most of two goods an economy can make with its resources and technology.
Week 2 · Comparative advantageWhat is absolute advantage?Show the answerHide the answer
Being able to produce more of a good than someone else with the same inputs.
Week 2 · Comparative advantageWhat is comparative advantage?Show the answerHide the answer
Being able to produce a good at a lower opportunity cost than someone else.
Week 2 · Comparative advantageIn an hour, Ana can bake 6 pies or 3 cakes, and Ben 4 pies or 4 cakes. Who has the comparative advantage in cakes?Show the answerHide the answer
Ben. A cake costs him 1 pie, while it costs Ana 6 ÷ 3 = 2 pies.
Ana has the comparative advantage in pies: a pie costs her half a cake and Ben a whole one.
Week 2 · Comparative advantageWhy can two people both gain from trade when one is better at making everything?Show the answerHide the answer
Each specializes where their opportunity cost is lower, so total output rises and both can end up with more.
Week 3 · Demand and supplyWhat does the law of demand say?Show the answerHide the answer
Other things equal, when a good's price rises, the quantity demanded falls.
Week 3 · Demand and supplyHow does a change in demand differ from a change in quantity demanded?Show the answerHide the answer
A change in the good's own price moves buyers along the demand curve. A change in anything else shifts the whole curve.
Week 3 · Demand and supplyHot dogs get more expensive. What happens to the demand for hot dog buns?Show the answerHide the answer
It decreases: the curve shifts left, because buns are a complement to hot dogs.
Week 3 · Market equilibriumWhat happens in a market when the price is above equilibrium?Show the answerHide the answer
Quantity supplied exceeds quantity demanded (a surplus, or excess supply), so sellers cut prices until the market clears.
Week 3 · Market equilibriumDemand rises while supply falls. What happens to equilibrium price and quantity?Show the answerHide the answer
Price rises for sure. Quantity could go either way, depending on which shift is larger.
Week 3 · Market equilibriumDemand is Qd = 100 − 2P and supply is Qs = 20 + 2P. What are the equilibrium price and quantity?Show the answerHide the answer
Setting 100 − 2P = 20 + 2P gives P = $20, and then Q = 60.
Week 4 · ElasticityWhat is the price elasticity of demand?Show the answerHide the answer
The percentage change in quantity demanded divided by the percentage change in price.
It is usually quoted without the minus sign. Above 1 is elastic, below 1 inelastic.
Week 4 · ElasticityPrice rises from $8 to $12 and quantity demanded falls from 50 to 30. What is the price elasticity, by the midpoint method?Show the answerHide the answer
1.25, so demand is elastic. Quantity falls 20/40 = 50% while price rises 4/10 = 40%.
The midpoint method divides each change by the average of the two values, so the answer is the same in either direction.
Week 4 · ElasticityWhen demand is inelastic, what does a price increase do to total revenue?Show the answerHide the answer
It raises total revenue, because quantity falls by a smaller percentage than price rises.
Week 4 · ElasticityWhat makes demand for a good more price elastic?Show the answerHide the answer
Close substitutes, a big share of the budget, being a luxury, a narrowly defined market, and more time to adjust.
Week 4 · ElasticityWhen the price of tea rises 10%, the quantity of coffee demanded rises 5%. What is the cross-price elasticity, and what does it say?Show the answerHide the answer
5% ÷ 10% = +0.5. It is positive, so tea and coffee are substitutes.
A negative cross-price elasticity marks complements.
Week by week
The whole deck: 48 cards over 10 weeks. Every week is open from day one.
- 1Thinking like an economist5 cards
- Scarcity and opportunity cost 5
- 2Gains from trade4 cards
- Comparative advantage 4
- 3Supply and demand6 cards
- Demand and supply 3
- Market equilibrium 3
- 4Elasticity5 cards
- Elasticity 5
- 5Government in markets5 cards
- Price ceilings and floors 2
- Who pays a tax 3
- 6Surplus and efficiency6 cards
- Consumer and producer surplus 3
- Deadweight loss 3
- 7Market failure5 cards
- Externalities 3
- Public goods 2
- 8Costs of production4 cards
- Costs of production 4
- 9Perfect competition4 cards
- Perfect competition 4
- 10Monopoly and oligopoly4 cards
- Monopoly 3
- Oligopoly and game theory 1