Review over Chapters 3,4,5

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Two ways to compare the ability of two people to produce a good

A situation in which quantity demanded is greater than quantity supplied

Two goods for which an increase in the price of one leads to a decrease in the demand for the other

In market economies what are the signals that guide economic decisions?

The intersection of the supply and demand curves determines the

The gains from specialization and trade are based on

According to the law of demand, as the price of a good falls the quantity demanded

According to the law of supply, as the price of a good rises, the quantity supplied