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45 Cards in this Set

  • Front
  • Back
MIXED ECONOMY
economic activity is carreid on by both private enterpises and the government
PRODUCTION POSSIBILITIES SCHEDULE
traces the various amounts of two goods that can be produced efficiently with a given technology and resources.
ECONOMIC MODELS
attempts to depict the basic features of the economy
POSITIVE ECONOMICS
"what is" describes the economy, and construct models that predict either how the economy wil change or the effects of different policies
NORMATIVE ECONOMICS
refers to value judment as "what ought to be" attempts to evaluate alternative policies, wieghing up vaiorus benefits and costs.
TRANSFER PAYMENTS
payments that transfer money from one individual to another but not in return for the provision of goods or services
UTILITY POSSIBILITIES CURVE
traces out he maximum level of utility that may be achieved by two consumers
PARETO EFFICIENCY
property that no one can be made better off without someone being made worse off
PARETO PRINCIPLE
instituting any improvements that someone is made better but no one made worse off
CONSUMER SOVEREIGNTY
individuals ar ethe best judge of their own needs and wants, of what is in their own best interests
PRODUCT MIX EFFICIENCY
produce the goods that consumers want.
MARGINAL BENEFIT
satisfaction of consuming an extra unit
MARGINAL COST
the price paid for the extra unit either consumption or producing
EXCHANGE EFFICIENCY
goods produced go to individuals who value/want them most
PRODUCTION EFFICIENCY
an increase in production of one good leads to a decrease in production of another good
MARGINAL RATE OF SUBSTITUTION
slope of the indifference curve. nthe amount of one commodity which an individual is willing to give up in exchange for a unit of another commodity
INDIFFERNCE CURVES
gives the combo of goods among which an individual is indifferent or which yiel the same level of utility
ISOCOST LINE
different combo of inputs that cost the firm the same amount
ISOQUANTS
trace out the different comos of inputs that produce the same quantities of outputs
MARGINAL RATE OF TECHNICAL SUBSTITUTION
slope of the isoquant. the amount of land required to compensate for a decrease in the input of labor by one unit
MARGINAL RATE OF TRANSFORMATION
slope of the production possibilities schedule. tells us home many extra of one unit we can have if we reduce the production of another unit by one
BUDGET CONSTRAINT
gives the combo of goods that a consumer can by given income and price
NATURAL MONOPOLY
a situation where its cheaper for a single firm to produce the entire output than for each of several firms to produce part of it
PURE PUBLIC GOOD
a good that is nonrival and nonexcludable and is provide for users collectively,
MARGINAL REVENUE
extra revenue obtained from selling an extra unit and is equal to marginal cost
RATIONING SYSTEM
any method restricting consumption of a good
FREE RIDER PROBLEM
reluctance of individuals to contribute voluntarily to the support of public goods
TRANSACTION COSTS
costs associated with exclusion ex. toll collectors
PUBLICLY PROVIDED PRIVATE GOOD
large marignal cost associated with supplying additional individuals ex. education
FEASIBILITY CURVE
gives the maximum level of private goods consumption consistent with each level of public goods for our given tax system
PUBLIC POLICY
course of action made up of a series of decision, dicrete choices over a period of time
POLITICS
involves the "authoritative allocation of values
GOVERNMENT
the set of insitituion tha tmake these allocations, that resolve htese conflicts.
INPUTS
two types: suports and demands. Supports include overal support for political system, leaders, and acceptance of specific policies and demands are requests for action on part of the political system and feed direclty into the policy process
OUTPUTS
tangible and symbolic results of govenment decision
OUTCOMES
results of government outputs
POLICY PROCESS
consists of 8 stages: problem identification, agenda building, policy formation, polic adoption, budgeting, implementation, evaluation, policy succession
PROBLEM IDENTIFICATION
demands for government action to resolve a problem or take advantage of an opportunity: it is an attempt to get government to see that a problem or opportunity exists
AGENDA BUILDING
those items that policy makers are discussing and seriously considering. 3 streams problems: policies, and political
PROBLEM STREAM
problem identification stage
POLICIES STREAM
consists of both a community of policy specialist and the proposal thsi community generates
POLITICAL STREAM
composed of swings in national mood, changes in public opinion, election results, changes of administration, etc
POLIC FORMULATION
DEVELOP A PLAN TO REMEMDY THE PROBLEM
POLICY GOAL
what the government is trying to achieve: 4 generic goals: security, efficiency, equity, and liberty.
5 GENERIC POLICY SOLUTION
expected results of policy formulation is a solution to the problem: inducements, rules, facts, rights, and powers