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23 Cards in this Set
- Front
- Back
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Sunk cost
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a previously incurred and irreversible cost
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rational choice
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a choice that uses the available resources to best achieve the objective of the person making the choice.
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Margin
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A choice made comparing all the relevant alternatives systematically and incrementally.
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Positive statements
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are about what is
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normative statements
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about what ought to be
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factors of production
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land,labor,capital,entrepreneurship
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human capital
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the knowledge and skill that people obtain from education on the job train gin and work experience
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personal distribution income
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the distribution of income among households
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functional distribution of income
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the distribution of income among the factors of production
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factor markets
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markets in which the services of factors of production are bought and sold
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production efficiency
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a situation in which the economy is getting all that it can from its resources and cannot produce more of one good or service without producing less of something
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trade off
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an exchange-giving up one thing to get something else
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economic growth
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the sustained expansion of production possibilities
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absolute advantage
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when one person is more productive than another person in several or even all activities
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comparative advantage
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the ability of a person to perform an activity or produce a good a service at a lower opportunity cost than anyone else
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quantity demanded
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the amount of any good service or resource that people are willing and able to buy during a specified period of time at a specified place
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law of demand
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other things remaining the same if the price of a good rises the quantity demand of that good decreases and if the price of a good falls the quantity demanded of that good increases
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normal good
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a good for which the demand increases when income increases and demand decreases when income decrease
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inferior good
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a good for which demand decreases when income increases and demand increases when income decreases
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price of elasticity of demand
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a measure of the responsiveness of the quantity demanded of a good to a change its price when all other influences on buyers plans remain the same
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how to calcite percentage change in price
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percentage change in price =
[ ( New price - Initial price)/ initial price ] X 100 |
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mid point method
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percentage change in price =
[ ( New price - Initial price)/ (new price + initial price ] X 100 |
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percentage change in quantity
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percentage change in price =
[ ( New quantity- Initial quantity / (new quantity+ initial quantity] X 100 |
