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Definition
| group of buyers and sellers of a particular good or service |
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| A market in which there are many buyers and sellers so that each has a negligible impact on the market place |
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| the amount of a good that buyers are willing and able to purchase |
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| The claim that all other things equal, the quantity demanded of a good falls when the price of a good rises |
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| table showing relatiionship between the price of a good and the quantity demanded |
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| A graph of the relationship between the price of a good and the quantity demanded |
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| sum of all the individual demands for a particular goods or services |
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| good for which, other things equal, an increase in income leads to an increase in demand |
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| A good for which, other things equal, an increase in income leads to a decrease in demand |
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| two goods for which an increase in the price of one leads to an increase in the demand for another |
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| two goods for which an increase in the price of one leads to a decrease in the demand for the other |
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| amount of a good that sellers are willing and able to sell |
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Definition
| the claim that, other things equal, the quantity supplied of a good rises when the price of a good rises |
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| A table that shows the relationship between the price of a good and the quantity supplied |
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| A graph of the relationship between the price of a good and the quantity supplied |
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Definition
| situation in which the market price has reached the level at which quantity supplied equals quantity demanded |
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| The price that balances quantity supplied and quantity demanded |
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| the quantity supplied and the quantity demanded at the equilibrium price |
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Definition
| a situation in which quantity supplied is greater than quantity demanded |
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Definition
| A situation in which quantity demanded is greater than quantity supplied |
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Definition
| The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance |
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| FACTORS THAT SHIFT DEMAND CURVE |
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Definition
- Price of Complements
- Expectations
- Price of Substitutes
- Income
- Number of Buyers
- Tastes
- Taxes
- Season
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Term
| Factors that shift supply |
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Definition
- Subsidies and Taxes
- Input Prices
- Price of substitutes in production
- Technology
- Expectations
- Number of sellers
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Definition
| a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants |
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Term
| Price elasticity of demand |
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Definition
| A measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by percentage change in price |
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Definition
| The amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold |
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| Income Elasticity of Demand |
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Definition
| measure of how much the quantity demanded of a good responds to a change in consumers'income computed as the percentage change in quantity demanded divided by the percent change in income |
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| Cross Price Elasticity of Demand |
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Definition
| a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good |
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| Price Elasticity of supply |
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Definition
| a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price |
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| Income Elasticity of Demand will be Positive or Negative for a Normal Good? |
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Definition
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Term
| For an Inferior Good, Income elasticity of demand will be positive or negative? |
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Definition
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| What are the determinants of Price Elasticity of Supply? |
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Definition
| Ability to change and Time |
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Definition
| The study of how the allocation of resources affects economic well being |
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Definition
| The maximum amount that a buyer will pay for a good |
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Definition
| The amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it |
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| The value of everything a seller must give up to produce a good |
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| amount a seller is paid for a good minus the seller's cost of providing it. |
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| The property of a resource allocation of maximizing the total surplus received by all the members of society |
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| property of distributing economic prosperity uniformly among the members of society |
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Definition
| fall in total surplus that results from a market distortion such as a tax |
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| the ability to produce a good using fewer inputs than another producer |
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| Whatever must be given up to obtain some item |
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Definition
| The ability to produce a good at a lower opportunity cost than another producer |
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Definition
| Goods produced abroad and sold domestically |
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Definition
| Goods produced domestically and sold abroad |
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| Price of a good that prevails in the worldmarket for that good |
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Definition
| A tax on goods produced abroad and sold domestically |
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Definition
| The uncompensated impact of one person's actions on the well being of a bystander |
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| Internalizing the Externality |
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Definition
| Altering the incentives so that people take acount of the external effects of their actions |
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Definition
| A tax dsigned to induce private decision makers to take account of the social costs that arise from a negative externality |
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Definition
| The proposition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own. |
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Definition
| the costs that parties incur in the process of agreeing to and following through on a bargain |
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Definition
| The property of a good whereby a person can be prevented from using it |
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Definition
| The property of a good whereby one person's use diminishes other people's use |
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Definition
Goods that are both rival and excludable in consumption
(i.e. coffee) |
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Definition
| Goods that are neither excludable nor rival in consumption (i.e. national defense) |
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Definition
| Goods that are rival in consumption but not excludable (i.e. fishing, state park) |
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Definition
| goods that are exludable but nonrival (i.e. cable, electricity) |
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Definition
| A person who receives the benefit of a good but avoids paying for it |
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Definition
| study that compares the costs and benefits to society of providing a public good |
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Definition
| A parable that illustrates why common resources are used more than is desirable from the standpoint of society as a whole |
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Term
| If the demand curve is uncertain, in providing a disincentive, it is best to do what? |
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Definition
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| If the demand curve is certain, in providing a disincentive, what sould be used? |
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Definition
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Definition
| the amount a firm receives for the sale of its output |
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Definition
| Market value of the inputs a firm uses in production |
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Definition
| Total revenue minus total cost |
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Definition
| input costs that require an outlay of money by the firm |
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Definition
| input costs that do not require an outlay of money by the firm |
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Definition
| Total revenue minus total cost, including both explicit and implicit costs |
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Definition
| total revenue minus total explicit cost |
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Definition
| the relationship between quantity of inputs used to make a good and the quantity of output of that good. |
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Term
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Definition
| an increase in output that arises from an additional unit of output |
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Term
| Diminishing Marginal Product |
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Definition
| property whereby the marginal product of an input declines as the quantity of the input increases |
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Definition
| costs that do not vary with the quantity of output produced |
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Definition
| costs that vary with the quantity of output produced |
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Definition
| total costs divided by the quantity of output |
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Term
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Definition
| variable costs divided by quantity of output |
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Definition
| fixed cost divided by the quantity of output |
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Definition
| increase in toal cost that arises from an extra unit of production |
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Definition
| quantity of output that minimizes average total cost |
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Definition
| The property whereby long run ATC falls as quantity of output increases |
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Term
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Definition
| property by which long run ATC rises as quantity of input increases |
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Term
| Constant Returns to Scale |
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Definition
| property whereby long run ATC stays the same as quantity of output changes |
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Term
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Definition
| A market with many buyers and sellers trading identical products so that each buyer and seller is a price taker |
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Definition
| Total Revenue divided by quantity sold |
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Definition
| Change in Total revenue from an additional unit sold |
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Definition
| cost that has already been committed and cannot be recovered. |
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Definition
| A firm that is the sole seller of a product without close substitutes |
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Definition
| monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms |
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Definition
| the business practice of selling the same good at different pricesto different customers |
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Term
| What are the three main sources of Monopoly? |
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Definition
| Monopoly resources, Goverment created, or Natural Monopoly (ATC for some product continually falls) |
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Definition
| when price goes down, Total Revenue goes down |
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Definition
| As quantity increase, total Revenue increase |
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Definition
| A market Structure in which only a few sellers offer similar or identical products |
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Definition
| a market structure in which many firms sell products that are similar but not identical |
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Definition
| An agreement among firms in a market about quantities to produce or prices to charge |
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Definition
| A group of firms acting in unison |
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Definition
| a situation in which economic actors interacting with one another each choose their best strategy given the strategies that all other economic actors have chosen |
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Definition
| A particular "game" between two captured prisoners that illustrates why cooperation is difficult to maintain even when it is mutually beneficial. |
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Definition
| a strategy that is best for a player in a game regardless of the strategies chosen by the other players |
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Definition
| the limit on the consumption bundles that a consumer can afford |
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Definition
| A curve that shows consumption bundles that give the customer the same level of satisfaction |
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Term
| marginal rate of substitution |
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Definition
| the rate at which a consumer is willing to trade one good for another |
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Definition
| two goods with straight line indifference curves |
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Definition
| two goods with right angle indifference curves |
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Definition
| tendancy of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior |
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Definition
| difference in access to relavent knowledge |
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Definition
| tendancy for the mix of unobserved attributes to become undesirable from the standpoint of an uninformed party |
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Definition
| action taken by informed party to reveal private information to an uninformed party |
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Definition
| action taken by an uninformed party to induce an informed party to reveal information |
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