Are 201

Front 1

externality

Back 1

a cost or benefit that arises from: production that falls on someone other than the producer; consumption that falls on someone other than the consumer

Front 2

negative externality

Back 2

a production or consumption activity that creates an external cost

Front 3

positive externality

Back 3

a production or consumption activity that creates an external benefit

Front 4

marginal private cost

Back 4

the cost of producing an additional unti of good or service that is beared by the producer of that good/servuce

Front 5

marginal external cost

Back 5

the cost of producing an additional unti of a good or service that falls on people other than the producer

Front 6

marginal social cost

Back 6

the marginal cost that falls on the entire society (producers and consumers alike)
=marginal cost + merinal external cost

Front 7

property rights

Back 7

legally establisged titltes to the ownership, use, and disposal of factors of production and goods and services

Front 8

coase theorem

Back 8

if proerty rights exist, only a small number of parties are involved and transactions costs are low, then private transactions are efficient and the outcome is not affected by who is assigned the property right

Front 9

transactions costs

Back 9

the opportunity costs of conducting a transaction

Front 10

Elasticity: necesities

Back 10

has poor substitutes so the demand is inelastic (food)

Front 11

Elasticity: luxuries

Back 11

has many substitutes so its demand is elastic (vacations)

Front 12

time elapsed since price change

Back 12

the more time that has passed since a price change, the more elastic is the demand and supply for the good

Front 13

elastic supply

Back 13

quantity supplied changes more than the change in price

Front 14

elastic demand

Back 14

quantity demanded changes more than the change in price does

Front 15

storage possibilities

Back 15

a good with this ability has a more elastic supply

Front 16

comparative advantage

Back 16

ability to produce something at a lower opportunity cost than someone else

Front 17

absolute advantage

Back 17

someone is more productive than another: they can produce more of a given item in the same amount of time

Front 18

law of demand

Back 18

if the price of a good rises, its quantity demand falls
if the price of a good falls, then the quantity demanded rises

Front 19

change in demand

Back 19

a change in the quantity that people plan to buy when caused by any influence BESIDES a change in price

Front 20

demand: complement

Back 20

a good that is consumed with another good

Front 21

demand: complement (law)

Back 21

the demand for a good increases if the price of its complement falls
the demand of a good decreases if the price of its complemente rises

Front 22

demand: substitute

Back 22

a good that can be consumed in place of another good

Front 23

demand: substitute (law)

Back 23

the demand for a good increases if the price of one of its substitutes rises
the demand for a good decreases if the price of one of its substitutes falls

Front 24

normal good

Back 24

a good for which the demand increases when the income increases, and the demand falls when the income falls

Front 25

inferior good

Back 25

a good for which the demand decreases when the income increases, and the demand for the good increases when the income decreases

Front 26

change in quantity demanded

Back 26

when people change the quantity of a good they plan to buy according to price

Front 27

market supply

Back 27

the supply of all sellers in a market

Front 28

substitute in production

Back 28

a good that can be produced in place of another good

Front 29

substitute in production (law)

Back 29

the supply of a good increases if the price of one of its susbstitutes in production falls
the supply of a good decreases if the price of one of its substitutes rises

Front 30

complement in production

Back 30

a good that is produced along with another good

Front 31

complement in production (law)

Back 31

the supply of a good increases if the price of one of its complements in production rises
the supply of a good decreases if the price of one of its complements in production falls

Front 32

productivity

Back 32

the amount of output for the unit of input

Front 33

law of market forces

Back 33

where there is a shortage the price rises
where there is a surplus the price falls

Front 34

shortage

Back 34

when the quantity demanded is higher than the quantity supplied

Front 35

surplus

Back 35

when the quantity supplied is higher than the quantity demanded

Front 36

factors of production

Back 36

land
labor
capital
entrepreneurship

Front 37

3 questions to answer

Back 37

what do we produce?
how do we produce?
and for whom do we produce?

Front 38

consumption goods and services

Back 38

goods/services bought by individuals for personal enjoyment

Front 39

capital goods

Back 39

goods bought by businesses to increase their output

Front 40

types of goods

Back 40

consumption goods, capital goods, government goods, and export goods

Front 41

government goods and services

Back 41

goods/services bought by governments

Front 42

export goods and services

Back 42

goods/services produced in one country and sold in another