Econ

Front 1

economic cost

Back 1

the payment that must be made to obtain and retain the services of a resource

Front 2

explicit cost

Back 2

monetary payments it makes to those from whom it must purchase resources that it does not own

Front 3

implicit cost

Back 3

opportunity costs of using resources it already owns instead of selling those resources to outsiders for cash

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normal profit

Back 4

the normal amount of accounting profit tat you would have most likely made in another venture

Front 5

short run

Back 5

a period too brief for a firm to alter its plant capacity, yet long enough to permit change in the degree to which a plants current capacity is used

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long run

Back 6

a period long enough for it to adjust the quantities of all the resources that it employs, including plan capacity

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total product

Back 7

the total quantity, or total output, of a particular good or service produced

Front 8

marginal product

Back 8

the extra output or added product associated with adding a unit of a variable resource

Front 9

law of diminishing returns

Back 9

when marginal product exceeds average product, average product rises; when marginal product is less than average product, average product declines.

Front 10

fixed costs

Back 10

costs that do not vary with changes in output (rent payments, interests, ect)

Front 11

variable costs

Back 11

costs that change with the level of output

Front 12

total costs

Back 12

the sum of fixed cost and variable cost at each level of output

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average fixed cost

Back 13

found by dividing total fixed costs by output

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average variable cost

Back 14

found by dividing total variable cost by output

Front 15

average total cost

Back 15

found by dividing total cost by output

Front 16

marginal cost

Back 16

extra or additional cost of producing one more unit.

Front 17

economies of scale

Back 17

explain the down slope part of the long-run average total cost curve; as plant size increases, over time the average production cost will be lower

Front 18

diseconomies of scale

Back 18

difficulty of efficiently controlling and coordinating a firms operations as it becomes a large-scale producer

Front 19

minimum efficient scale

Back 19

the lowest level of output which a firm can minimize long-run average costs`

Front 20

natural monopoly

Back 20

a relatively rare market situation in which average total cost is minimized when only one firm produces a particular good or service

Front 21

law of diminishing marginal utility

Back 21

satisfaction declines as a customer acquires additional units

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utility

Back 22

the satisfaction or pleasure one gets from consuming a good or service

Front 23

total utility

Back 23

total amount of satisfaction or pleasure a person derives from consuming some specific quantity

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marginal utility

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the change in total utility that results from the consumption of one extra unit

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benefits received principle

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households should purchase the goods and services of government in the same way they by other commodities

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ability to pay principle

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tax burden should be apportioned according to tax payers income and wealth

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progressive tax

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average rate increases as income increases

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regressive tax

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average rate drops as income rises

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proportional tax

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average rate is the same regardless of the size of income 'flat taxes'

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tax incidence

Back 30

degree to which a tax falls on a certain person/group

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sales tax

Back 31

levied on a full range of goods and services

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specific excise tax

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levied on one certain product

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U.S. Tax Structure

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Federal tax system = progressive
State & Local = regressive
Overall = progressive

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personal income tax

Back 34

taxable income; incomes of households and businesses after exemptions and deductions are taken

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midpoint formula

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E_d=(change in quantity)/(sum of quantities/2) ÷(change in price)/(sum of prices/2)

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elastic

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when change is greater than one

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inelastic

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when change is less than one

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unit elasticity

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when change is exactly one

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perfectly inelastic

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absolutely no response

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perfectly elastic

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when customer goes from buying zero to infinity as a response

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total revenue

Back 41

the total amount the seller receives from the sale of a product

Front 42

market period

Back 42

period that occurs when the time immediately after a change in market price is too short for producers to respond with change in quantity supplied