Reading...
Play button
Play button
Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
29 Cards in this Set
- Front
- Back
|
Resource
|
the inputs used in the production of goods and services; factors of production.
|
|
|
Utility
|
satisfaction a consumer obtains from the consumption of a good or service.
|
|
|
Marginal
|
additional; the change that results from an additional unit.
|
|
|
Economics
|
the social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.
|
|
|
Scarcity
|
The condition whereby the resources we use to produce goods and services are limited relative to our wants for them.
|
|
|
Scarce Good
|
economic good; good for which you can NOT get all you want at zero cost.
|
|
|
Free Good
|
opposite of above; you can get all you want at zero cost.
|
|
|
Price
|
signal that tells producers what and how much to produce; in a standard market transaction it is paid by the consumer.
|
|
|
Cost
|
The sacrifice associated with making a choice; in a standard market transaction it is paid by the producer.
|
|
|
Explicit Cost
|
out of pocket, monetary payment
|
|
|
Implicit/ Opportunity Cost
|
most valued option forgone
|
|
|
Economic Cost
|
explicit and implicit costs
|
|
|
Product Market
|
households demand goods and services supplied by firms
|
|
|
Resource Market
|
firms demand resources supplied by households.
|
|
|
Demand Schedule
|
Table that shows how much of a good or service a consumer will want to buy at various prices.
|
|
|
Demand Curve
|
line that shows maximum that consumers are willing to play for any quantity
|
|
|
Quantity Demanded
|
number of units consumers are willing to purchase at a specific price.
|
|
|
Supply Schedule
|
table that shows how much of a good or service producers will offer for sale at various prices
|
|
|
Law of Supply
|
Price of a good and quantity supplied are directly related.
|
|
|
Supply Curve
|
line that shows minimum that producers are willing to accept as payment for any quantity
|
|
|
Supply
|
Relationship between P and Q's for all possible prices
|
|
|
Quantity Supplied
|
number of units producers are willing to offer for sale at specific price
|
|
|
Factors that shift supply curve
|
-input/resource price
-input prices and supply move opposite -technology -production process of changing resources into goods and services -when technology improves, supply increases |
|
|
Equilibrium Price
|
price at which the market clears. no tendency to change
|
|
|
Shortage
|
at prices below Pe, Qd > Qs
|
|
|
Consequences of Price Floors
|
-surplus
-inefficient allocation among producers -wasted resources -protection from imports |
|
|
Consumer Surplus
|
willingness to pay amount paid
|
|
|
Willingness to pay
|
The maximum prices at which a consumer will buy a good
|
|
|
Inferior Goods
|
good that decreases in demand when consumer income rises
|
