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20 Cards in this Set

  • Front
  • Back
Efficiency Loss of Tax
tax causes decline in output for chich marginal benefit exceeds marginal cost
Diamond-Water Paradox
Price of a product is related to marginal utility not total utility
Scarcity
having more of "this" mean having less of "that"
**Choices must be made
Economic Perspective
how to make choices
Technical Effiency
least costly way of production
Production Possibilities Curve
Max. combination of goods attainable w/ fixed resources and technology
Diminishing Marginal Utility explains why:
demand curves are down sloping
Tax incidence
who bears the burden of the tax
Positive Statement
Fact
Normative Statement
Belief
Comparative Advantage
a (person) can produce more cheaply than another and still find it beneficial to trade
Barry Lind
Price Elasticity less than one for corn
yacht tax
failed demand more price elastic
ceiling prices
shortages
price floor
surpluses
MR=MC
only when firm is "price taker"
Inelastic demand curve excise tax
buyers
Elastic demand curve excise tax
sellers
Protective Tariff
increase price and sales of domestic producers
Comparative advantage
It is impossible for a nation to have a comparative advantage in producing everything.