Study your flashcards anywhere!

Download the official Cram app for free >

  • 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

1/58

Click to flip

58 Cards in this Set

  • Front
  • Back
ceteris paribus
all other variables remain fixed
economics
the study of choice in scarcity
marginal change
a small, one-unit, change
macroeconomics
the study of the nation's economy as a whole
microeconomics
the study of choices made by households - gov't and their choices affect on markets
normative economics
analysis answering "What Ought to be?"
positive economics
analysis answering "What Is or what Will be?"
scarcity
resources are limited
variable
something that can take on different values
long run
long enough for a firm to change all of the factors of production, like build a new facility
marginal benefit
the extra benefit resulting from an increase in some activity
marginal cost
the additional cost resulting from an increase in some activity
marginal product of labor
the change in output from one additional worker
norminal value
the face value of money
real value
the value of money in terms of what it can buy
opportunity cost
what you sacrifice to get something
short run
a period of time when one or more factors is fixed, a firm cannot modify facility
external cost
a third party's cost
external benefit
a third party's benefit
externality
the effect of a transaction on a third party
comparitive advantage
the ability of one person or nation to produce a good at a lower opportunity cost
absolute advantage
the ability of one person or nation to produce a good at a lower absolute cost
centrally planned economy
gov't controls productions, goods, and distribution
perfectly competitive market
a market with a very large number of firms, so single firm affects market price
demand schedule
a table that shows the relationship between price and customer demand, ceteris paribus
individual demand curve
a curve that shows the relationship between price and single customer demand, ceteris paribus
quantity demanded
the amount of a good an individual or group of consumers is willing to buy
law of demand
the higher the price, the smaller the quantity demanded, ceteris paribus
change in quantity demanded
change in demand resulting from change in PRICE
substitution effect
the change in consumption resulting from a change in the PRICE of one good relative to the PRICE of another good
income effect
the change in consumption resulting from a change in REAL INCOME
market demand curve
a curve showing the relationship between price and quantity demanded by ALL consumers together, ceteris paribus
supply schedule
a table of numbers that shows the relationship between price and quantity supplied, certeris paribus
quantity supplied
the amount of a good an individual girm or firms as a group are willing to sell
change in quantity supplied
a change in the quantity supplied resulting from a change in the PRICE of a good
market supply curve
a curve showing the relationship between PRICE and QUANTITY supplied by all producers together
market equilibruim
quantity demanded = quantity supplied, no pressure to change price
excess demand
consumers demand more than suppliers are willing to give
excess supply
producers willing to sell more than consumers are willing to buy
change in demand
change in demand caused by something OTHER THAN PRICE, represented by a graphical SHIFT
normal good
when income increases = demand increases
substitutes
two goods related in suh a way that an increase in PRICE for one increases DEMAND for the other
complements
increase in price of one good decreases demand for another
inferior
increase in income decreases demand
change in supply
change in supply resulting from something OTHER THAN PRICE, graphically represented by shift of supply curve
price elasticity of demand
a measure of the responsiveness of QUANTITY demanded to changes in PRICE.

% Change in Quantity Demanded
-----------------------------
% Change in Price
price elasticity of supply
a measure of the responsiveness of the QUANTITY supplied to changes in PRICE.

% Change in Quantity Supplied
-----------------------------
% Change in Price
elastic demand
price elasticity > 1
inelastic demand
price elasticity < 1
unitary elastic
price elasticity = 1
perfectly inelastic demand
price elasticity = 0
perfectly elastic demand
price elasticity = infinate
income elasticity of demand
responsiveness of QUANTITY demanded to INCOME change

% Change Quantity Demanded
---------------------------
% Change in Income
cross elasticity of demand
responsiveness of quantity DEMANDED to changes in the PRICE of a RELATED GOOD.

% Change Quantity Demanded
--------------------------
% Change Price Related Good
perfectly inelastic supply
price elasticity of supply = 0
perfectly elastic supply
price elasticity of supply = infinate
price-change formula
shows percentage change in EQUILIBRUIM PRICE resulting from a change in DEMAND or SUPPLY,given values for the price elasticity of supply and the price elasticity of demand.
midpoint method
Change in variable
-------------------
Average value of variable