Term
| Law of diminishing marginal utility |
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Definition
| as consumption goes up, the marginal utility (enjoyment) goes down |
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Term
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Definition
| where a company can produce things cheaper than if more than 1 firm produced the product |
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Term
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Definition
| the extra cost of producing 1 or more unit of output |
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Term
| average variable cost (AVC) |
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Definition
| firms total variable cost divided by output |
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Term
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Definition
| firms total cost divided by output |
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Term
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Definition
| firms total fixed cost divided by output |
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Term
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Definition
| the payment made by a firm to obtain and retain entrepreneurial ability |
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Definition
| total revenue of a firm minus its economic costs |
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Term
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Definition
| the extra utility a consumer obtains from the consumption of 1 additional unit of a good or service |
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Term
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Definition
| total $ received by a firm from selling a product |
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Term
| law of diminishing returns |
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Definition
| *when there's just a few people in class it's easier to teach and learn but as that number goes up it gets harder to teach and learn |
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Term
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Definition
| period of time long enough to enable producers to change the quantities of all the resources they employ |
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Term
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Definition
| get less out of what you put in |
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Term
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Definition
| period of time where plant sizes are fixed |
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Term
| constant returns to scale |
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Definition
| you get exactly what you put in |
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Term
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Definition
| additional output produced when 1 additional unit of a resource is employed |
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Term
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Definition
| total output of a particular g/s produced by a firm |
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Term
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Definition
| total output produced per unit of a resource employed |
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Term
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Definition
| getting more out of what you put in |
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Term
| economic (opportunity) cost |
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Definition
| a payment that must be made to obtain and retain the services of a resource |
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Term
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Definition
| any cost that doesn't change when the output is changed |
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Term
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Definition
| the lowest level of output at which a firm can minimize long run average total cost |
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Term
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Definition
| cost that in total increases when the firm increases its output and decreases when the firm reduces its output |
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Term
| price elasticity of demand |
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Definition
measure of the responsiveness of buyers to a change in the price of a product or resource
"buy more gas because it dropped 50 cents" |
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Term
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Definition
| demand or supply for which the elasticity coefficient is equal to 1 |
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Term
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Definition
| product or resource demand for which the elastic coefficient is less than 1 |
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Term
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Definition
product or resource demand whose price elasticity is greater than 1
*a pair of shoes |
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Term
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Definition
| a test to determine elasticity of demand between any 2 prices |
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Term
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Definition
| the want satisfying power of a good or service |
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Term
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Definition
| human behavior based on comparison of marginal costs and marginal benefits |
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Term
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Definition
| the limit that the size of a consumer's income imposes on the ability of that consumer to obtain goods/services |
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Term
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Definition
| rule that each dollar spent on each good/service yields the same marginal utility |
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Term
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Definition
| change in the quantity demanded of a consumer good that results from a change in its relative expensiveness caused by a change in the products price |
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Term
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Definition
| monetary payment a firm must take to an outsider to obtain a resource |
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Term
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Definition
| change in the quantity demanded of a product that results from the change in real income caused by a change in the products price |
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Term
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Definition
| period where producers are unable to change the quantity produced in response to a change in price |
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Term
| cross elasticity of demand |
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Definition
| ratio of the percent of change in quantity demanded of 1 good to the percent of change in the price of some other good |
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Term
| income elasticity of demand |
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Definition
| ratio of the percent change in the quantity demanded of a good to a percent change in consumer income |
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Term
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Definition
| difference between the maximum price a consumer will pay for an additional product and the market price |
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Term
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Definition
| difference between the actual price a producer gets and the minimum acceptable price |
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Term
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Definition
| reductions in combined consumer and producer surplus caused by an underallocation or overallocation of resources to the production of a g/s |
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Term
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Definition
| product or resource demand in which the quantity demanded can be any amount at a particular product price |
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Term
| perfectly inelastic demand |
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Definition
| product or resource demand in which price can be of any amount at a particular quantity of the product or resource demanded |
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Term
| price elasticity of supply |
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Definition
| the ratio of the percent change in quantity supplied of a product or resource to the percent change in its price |
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Term
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Definition
| total amount of satisfaction gotten from the consumption of a product |
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Term
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Definition
| change in Q/sum of Q div 2 DIVIDED BY change in price over sum of prices div 2 |
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