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14 Cards in this Set
- Front
- Back
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Incentives |
Rewards and penalties that motivate behavior |
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Opportunity cost |
Value of opportunities lost |
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Demand curve |
Function that shows the quantity at different prices |
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Quantity demand |
Quanitity that buyers are willing and able to buy at a particular price |
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Consumer surplus |
Consumer's gain from exchange or the difference between the max price a consumer is willing to pay for a certain quantity and the market price |
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Total consumer surplus |
Total of all consumer surpluses for each consumer and unit |
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Normal good |
Good in which demand increases when income increases |
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Inferior good |
Good for which demand decreases when income increases |
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Substitute |
2 food for which a decrease in the price of one leads to a decrease in demand for the other |
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Complements |
2 foods for which a decrease in the price of one leads to an increase in the demand for another |
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Supply curve |
Function that shows the quantity supplied at different prices |
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Quantity supplied |
Quantity that sellers are willing and able to sell at a particular price |
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Producer surplus |
Producer's gain from exchange or the difference between the market price and the minimum price at which a producer would be willing to sell a particular quantity |
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Great economic problem |
Problem of how to arrange out limited resources to satisfy as many of our wants as possible |
