Econ

Front 1

Basic Assumptions about Preferences

Back 1

Completeness, Transitivity, More is better then less

Front 2

Completeness

Back 2

a person will be satisfied with either basket

Front 3

Transitivity

Back 3

if consumer prefers Porshe to Cadillac and Cadillace to Chevrolet then Porsche is preferred to Chevrolet

Front 4

MIB

Back 4

Consumers always prefer more to less

Front 5

Indifference Curve

Back 5

curve representing all combos of market baskets that provide a consumer with the same level of satisfaction (preference)

Front 6

indifference map

Back 6

graph containg a set of indifference curves showing the market baskets among which the consumer is indifferent

Front 7

MRS

Back 7

maximum amount of a good that a consumer is willing to give up to obtain one additional unit of another good

Front 8

Budget constraints

Back 8

constraints that consumers face as a reult of limited incomes

Front 9

budget line

Back 9

all combos of goods for which the total amount of money spent is equal to income

Front 10

marginal benefit

Back 10

benefit from the consumption of one additional unit of a good

Front 11

marginal cost

Back 11

cost of one additional unit of a good

Front 12

marginal utility

Back 12

additional satisfaction obtained from consuming one additional unit of a good

Front 13

equal marginal principle

Back 13

principle that utility is maximized when the consumer has equilized the marginal utility per dollar of expenditure across all goods

Front 14

individual demand curve

Back 14

curve relating the quantity of a good that a single consumer will buy to its price

Front 15

substitution effect

Back 15

change in consumption of a good associated with a change in its price, with the level of utility held constant

Front 16

income effect

Back 16

change in consuption of one good reulting form an increase in purchasing power, with relative prices held constant

Front 17

consumer surplus

Back 17

difference between what a consumer is willing to pay for a good and the amount actually paid

Front 18

production function

Back 18

function showing the highest output that a firm can produce for every specified combination of outputs

Front 19

isoquant

Back 19

curve showing all possible combinations of inputs that yield the same output

Front 20

isoquant map

Back 20

graph combining a number of isoquants, used to describe production function

Front 21

isocost line

Back 21

graph showing all possible combinations of labor and capital that can be purchased for a given total cost.