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30 Cards in this Set

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  • Back
What is the study of the allocation of scarce resources among competing entities?
economics
What is a descriptive statement that can be shown to be true or false?
positive statement
What is a prescriptive statement describing what ought to be, but cannot be tested?
normative statement
What kind of solutions exist for economic problems?
There are no solutions to economic problems, only tradeoffs
What is something that you'd rather have some of than none of?
a good
What are free goods?
goods that you can get more of without having to give anything up
What are economic goods?
goods that you must give something up in order to get more
What does TANSTAAFL stand for?
there ain't no such thing as a free lunch, meaning there are costs associated with everything
What is the result of scarcity that decides how resources get allocated?
competition
What are the 4 forms of competition (also known as methods of discriminating)?
1.) force or violence
2.) bribery or mutually advantageous exchagne
3.) prejudice
4.) performance
What is changing or creating goods and services which increases someone's utility, time of availability, place or form?
production
What does it mean when someone has a comparitive advantage over another?
they have a lower opportunity cost of production
What is producing more of a good than you intend to consume?
specialization
What is a barrier to exchange that can lead to production inefficiency?
tax
The cheaper it is to communicate and exchange, the greater the gains from specialization. What is this called?
extent of the market
Is it possible to have a comparitive advantage in both goods being produced?
no, if you're operating efficiently you cannot produce more of one good without producing less of the other
What is the production possibilities frontier?
the result of specialization with the low cost producer producing first
What are property rights?
the rights of people to the use of goods, includes exclusivity of use and transferability
What are costs or benefits associated with production or consumption that are not reflected in market prices and fall on parties other than the buyers or sellers?
spillovers, or externalities
MCs + MCp > MBp
What does this relationship indicate?
overproduction
If the personal marginal benefit is less than the marginal cost to society plus the personal marginal cost, what is indicated?
overproduction
MCp < MBp + MBs
What does this relationship indicate?
underproduction
If the personal marginal cost is less than the personal marginal benefit plus the marginal benefit to society, what is indicated?
underproduction
What is trying to get a return in excess of cost called?
economic rent seeking
What is it called when everybody uses a common resource until the value of the common property dwindles to zero?
trajedy of the commons
What is the best example of a public good?
knowledge
What are the two qualties of a public good?
1.) consumption by one individual does not reduce the ability of others to consume the good
2.) nonexcludability
What has public good characteristics but does not provide substantial benefits to the community as a whole?
pseudo public good
What is it called when the cost of knowing something is greater than the benefits of knowing?
rational ignorance
What is trying to get the government to change the rules to benefit one group at the expense of others called?
political rent seeking