Term
|
Definition
| The unintended consequences of individual actions within the constraints of social institutions |
|
|
Term
|
Definition
| All decisions involve tradeoffs, there is a shortage of time, money, etc. Exists because we have unlimited wants, but limited resources to fulfill those wants. |
|
|
Term
|
Definition
| The highest valued alternative that must be given up in order to participate in an activity. |
|
|
Term
|
Definition
| Doing the best you can to achieve your objectives given what you have to work with. Achieving the most beneficial goal. |
|
|
Term
|
Definition
| Incremental adjustments to an existing plan |
|
|
Term
|
Definition
| Companies benefit from trade when they have comparative advantage |
|
|
Term
|
Definition
| A good can be produced at a lower opportunity cost than the competitor |
|
|
Term
|
Definition
| When an individual uses their resources to reciprocate an economic gain. |
|
|
Term
|
Definition
| Trading your time for a job, your job for money, and money for a goal of yours. Reciprocates back to society through some creation of wealth. |
|
|
Term
| Unproductive Rent-Seeking |
|
Definition
| Stealing something that you want, not giving any benefits to the economy. |
|
|
Term
| Production possibilities curve |
|
Definition
| A point on the line is an efficient point which offers maximum advantage. |
|
|
Term
|
Definition
| A point underneath the line on a production possibilities curve. Has 0 opportunity cost because not all resources have been used. |
|
|
Term
|
Definition
| A point beyond the production possibilities frontier that is not possible with current resources. |
|
|
Term
| Changes in resources pertaining to production possibilities |
|
Definition
| The more resources devoted to an activity, the smaller the payoff in devoting additional resources to that activity. |
|
|
Term
| Technological changes in relation to the production possibilities curve |
|
Definition
| Technology makes production possibilities larger. |
|
|
Term
| Sources of comparative advantage |
|
Definition
| Climate and natural resources, relative abundance of labor and capital, technology, and external economies |
|
|
Term
|
Definition
| Curve that shows the relationship between the price of a product and the quantity of a product demanded. Always has a negative slope. |
|
|
Term
|
Definition
| All other things equal, the quantity demanded is inversely related to the price |
|
|
Term
|
Definition
| As price rises, consumers switch to other goods |
|
|
Term
|
Definition
| As price rises, consumers real income falls & he/she can afford less |
|
|
Term
|
Definition
| As price rises, consumers real income falls & he/she can afford less |
|
|
Term
|
Definition
| When demand increases following a rise in income and falls following a decrease in income |
|
|
Term
|
Definition
| When demand decreases following a rise in income and increases following a fall in income |
|
|
Term
|
Definition
| Goods & services used for the same purpose(laptops & tablets) |
|
|
Term
|
Definition
| Goods & services used together(hot dogs & buns) |
|
|
Term
| factors that shift a demand curve |
|
Definition
| income, prices of related goods, tastes, population and demographics, expected future prices |
|
|
Term
|
Definition
| Change in the quantity demanded |
|
|
Term
|
Definition
| A change in actual demand |
|
|
Term
|
Definition
| Shows relationship between the price of a product and the quantity of the product supplied, has an upward slope |
|
|
Term
| Factors that shift the supply curve |
|
Definition
| Prices of inputs that go into the good, prices of alternative goods used for the same inputs, technology, expectations, market equilibrium |
|
|
Term
| Movement along the supply curve |
|
Definition
| Change in quantity supplied |
|
|
Term
| Movement of the supply curve |
|
Definition
|
|
Term
|
Definition
| The point at which both consumers are willing to buy and sellers are willing to sell |
|
|
Term
|
Definition
| When quantity supplied is greater than the quantity demanded, causes companies to cut prices |
|
|
Term
|
Definition
| When quantity demanded is greater than quantity supplied, causes higher prices |
|
|
Term
|
Definition
| Used to measure how one economic variable responds to another economic variable(like price and demand) |
|
|
Term
|
Definition
| When quantity demanded responds to change in price, percent change of quantity demanded will be greater than percent change to price |
|
|
Term
|
Definition
| When quantity demanded is not very responsive to change in price, percent quantity demanded will be less than percent change in price |
|
|
Term
|
Definition
| When demand curve is a perfectly horizontal line |
|
|
Term
|
Definition
| When demand curve is a perfectly vertical line |
|
|
Term
|
Definition
| Difference Between the highest price a consumer is willing to pay for a good and the price they actually pay |
|
|
Term
|
Definition
| Difference between the lowest price a firm would be willing to accept for a good and the price it actually receives |
|
|
Term
|
Definition
| The consumer surplus added to the producer surplus |
|
|
Term
|
Definition
| Government regulations on prices |
|
|
Term
|
Definition
| Legally determined minimal price that sellers may receive |
|
|
Term
|
Definition
| Legally determined maximum price that sellers may charge, common in rent control |
|
|
Term
|
Definition
| Difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays |
|
|
Term
|
Definition
| Additional benefit to a consumer for consumption from one more unit of a good or service |
|
|
Term
|
Definition
| Reduction in social surplus because of price control away from equilibrium |
|
|
Term
|
Definition
| The division of the burden of a tax between buyers and seller |
|
|
Term
|
Definition
| Item or economic activity on which the tax is levied |
|
|
Term
|
Definition
| Relationship between the tax collected and tax rate |
|
|
Term
|
Definition
| total amount of taxes collected divided by dollar value of tax base |
|
|
Term
|
Definition
| additional tax collected on the additional dollar value of tax base such as tax incidence |
|
|
Term
|
Definition
| personal taxes, corporate taxes |
|
|
Term
|
Definition
| Taxes on social security and medicare |
|
|
Term
|
Definition
| General sales tax, excise taxes, and tariffs |
|
|
Term
|
Definition
| Additional tax collected on each additional dollar as tax base increases, most important in determining the effect of tax on a consumer |
|
|
Term
|
Definition
| A curve that shows relationship between tax rates and tax revenue collected by the government |
|
|
Term
| Progressive transfers of income |
|
Definition
| People with lower income pay lower percentage of income in tax rather than those with higher income |
|
|
Term
| Regressive transfers of income |
|
Definition
| People with lower income pay higher percentage of income in tax than people with higher income |
|
|
Term
| Proportional transfers of income |
|
Definition
| Everyone, regardless of income, pays the same percentage of their income in taxes |
|
|
