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22 Cards in this Set

  • Front
  • Back
study of how societies allocate scarce resources
opportunity cost
the cost of any action given up to acomplish something. Made up of the explicit cost and implicit cost
explicit cost
accounting cost, $
implicit cost
non monetary cost associated with an action
arrangements where buyers and sellers exchange goods
what makes up transaction/market costs
Property rights,
Economic institutions
economics institutions
patterns of behavior when interacting w/ society. Both formal and informal
formal institutions
Strict laws
informal institutions
understood rules, customs, traditins.
Why is PPF concave?
Law of increasing cost, as you specialize in one good, other good costs more and more.
paratal optimal
a trade where both parties benefit, and aren't hurt
eco. insti.: child labor laws
comparative advantage: mining vs. modeling
measure of potential welfare a good brings to an individual
margianl anylasis
amount of utility that is gained or lost
marginal cost
incremental increase in OC resulting form an additional unit.
Marginal Benifit
the incremental increase in ones benifit resulting from an additional unit of consumption.
Law of demand
as price increases QD decreases, ceteris paribus
"law of supply"
as price increases, generally QS increases.
if price is greater than equilibrium price
if price is less than equilibrium price
comp. goods
goods that are purchased or consumed together.
Q move together
P differ
substitute goods
goods that are related to the point where they effect each other, but consumed together.
q differ
p move together