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24 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Profit
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a firms goal is to maximize
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Total Cost
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the amount that a firm pays for all the inputs that go into producing goods & services
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Variable Cost
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those that depend on the quantity of output produced
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Explicit Cost
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require a firm to spend money
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Pay Bills
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Implicit Cost
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represent oppurtunities that could have generated revenue if the firm had investment its resources in another
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Cost that represents forgone oppurtunities
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Account Profit
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when companies report their profit
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Economic Profit
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account for implicit cost
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Economic Scale
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if increasing the scale of production to output to obtain lower the minimun of the average total cost
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Competitive Market
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a market in which fully informed price taking buyers & sellers trade a standarized good or service
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Price Takers
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a buyer or seller who cannot affect the market price
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Market Power
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the ability to noticeablity affect market prices
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Average Revenue
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total revenue divided by quantity
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Marginal Revenue
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is change in revenue
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Interest Rate
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price of borrowing money for specific of time expressed as a percentage
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Compound
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Interest paid on interest that has already been earned
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Present Value
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how much a certain amount of money that will be obtained in the future is worth today
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Risk
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a special class of certainty in which the cost or benefits of an event or choice are uncertain
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Risk Diversification
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risks are shared across many different assets or people
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Complete Information
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When people are fully informed about the choices that they and other economic face
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Adverse Selection
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when buyers and sellers have different information about the quality of a good or the riskiness of a situation
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Principal
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Person who entrust someone with a task
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Agent
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A person who carries out a task on someone elses behalf
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Moral Hazard
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Tendency for everyone to behave in a riskier way or to merge on contracts when they do not face to full consequences of their actions
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Statistical Disrcimination
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Filling gaps in your information by generalizing based on observable characteristics
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