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42 Cards in this Set
- Front
- Back
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Amount of money a business receives in excess of it's expenses |
Profit |
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Something essential for survival |
Need |
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Struggle among producers for the dollars of consumers |
Competitions |
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Legal obligation to pay debts |
Liability |
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Amount of goods available |
Supply |
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Measure of how consumers respond to price changes |
Elasticity of demand |
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A sudden lack of availability of a good |
Supply shock |
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Illegal agreement among firms to divide the market, set prices, or limit production |
Collusion |
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Product that is considered the same no matter who produces or sells it |
Commodity |
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The extra benefit of adding one unit |
Marginal benefit |
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Principle that people may decide what agreement they want to enter into |
Free contract |
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Use of fewer resources than an economy is capable of using |
Underutilization |
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Doctrine that government generally should not intervene in the marketplace |
Laissez-faire |
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Grouping consumers based on how much they will pay for a good |
Price discrimination |
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Corporate profits paid out to stockholders |
Dividend |
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Government aid to the poor |
Welfare |
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The most desirable alternative given up as the result of a decision |
Opportunity costs |
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Change in consumption that results when a price increases causes real income to decline |
Income effect |
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Tax on the production or sale of a good |
Exercise tax |
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the extra cost of adding one unit |
Marginal cost |
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Direct payments of money by the government to poor, disabled, or retired people |
Cash transfers |
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Market structure in which many companies sell products that are similar buy not identical |
Monopolistic competition |
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Consuming less of a good and more of another as a reaction to a price increase |
Substitution effect |
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When quantity demanded is greater than quantity supplied |
Shortage |
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Two goods that are bought and used together |
Complements |
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Hope of reward or fear of penalty that encourages a person to behave in a certain way |
Incentive |
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Commitment to the value of work |
Work ethic |
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Expenses new businesses must pay before they can begin to produce and sell goods |
Start-up costs |
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Laws that encourage competition in the marketplace |
Antitrust laws |
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Not very sensitive to price changes |
Inelastic |
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Government allocation of goods and services |
Rationing |
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Goods that are used in place of one another |
Substitutes |
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Right of a government to take private property for public use |
Eminent domain |
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Principle that people have the right to control their possessions and use them as they wish |
Private property rights |
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All natural resources used to make goods and services |
Land |
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Selling a product below cost for a short period of time to drive competitors out of the market |
Predatory pricing |
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Sum of fixed cost plus variable costs |
Total cost |
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A product that is popular for a short period of time |
Fad |
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A price ceiling placed on the amount people pay for housing |
Rent control |
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Goods and services provided for free or at greatly reduced prices |
In-kind benefits |
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Entire amount of money a company receives by selling goods or services |
Total revenue |
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Chart that lists how much of a good a supplier will offer at various prices |
Supply schedule |
