• Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/21

Click to flip

21 Cards in this Set

  • Front
  • Back
Basic Assumptions about Preferences
Completeness, Transitivity, More is better then less
Completeness
a person will be satisfied with either basket
Transitivity
if consumer prefers Porshe to Cadillac and Cadillace to Chevrolet then Porsche is preferred to Chevrolet
MIB
Consumers always prefer more to less
Indifference Curve
curve representing all combos of market baskets that provide a consumer with the same level of satisfaction (preference)
indifference map
graph containg a set of indifference curves showing the market baskets among which the consumer is indifferent
MRS
maximum amount of a good that a consumer is willing to give up to obtain one additional unit of another good
Budget constraints
constraints that consumers face as a reult of limited incomes
budget line
all combos of goods for which the total amount of money spent is equal to income
marginal benefit
benefit from the consumption of one additional unit of a good
marginal cost
cost of one additional unit of a good
marginal utility
additional satisfaction obtained from consuming one additional unit of a good
equal marginal principle
principle that utility is maximized when the consumer has equilized the marginal utility per dollar of expenditure across all goods
individual demand curve
curve relating the quantity of a good that a single consumer will buy to its price
substitution effect
change in consumption of a good associated with a change in its price, with the level of utility held constant
income effect
change in consuption of one good reulting form an increase in purchasing power, with relative prices held constant
consumer surplus
difference between what a consumer is willing to pay for a good and the amount actually paid
production function
function showing the highest output that a firm can produce for every specified combination of outputs
isoquant
curve showing all possible combinations of inputs that yield the same output
isoquant map
graph combining a number of isoquants, used to describe production function
isocost line
graph showing all possible combinations of labor and capital that can be purchased for a given total cost.