Micro Economics

Front 1

Scarcity

Back 1

The inability to satisfy all our wants.

Front 2

Economics

Back 2

Is the social science that studies the choices that individuals, business, governments, and entire societies make as they cope with sarcity and incentives that influence and reconcile those choices.

Front 3

Incentives

Back 3

A reward that encourages an action or a penalty that discourages one.

Front 4

Goods and services

Back 4

Are objects that people value and produce to satisfy human wants.

Front 5

Trade-off

Back 5

Is an excahange- giving up one thinng to get something else

Front 6

Opportunity cost

Back 6

The highest valued alternative hat we give up to give something.

Front 7

Marginal Cost

Back 7

The cost of an increase in an activity

Front 8

Ceteris Paribus

Back 8

A latin term that means "other things being equal" or"If all other relevant things remain the same

Front 9

Marginal Cost

Back 9

The oppurtunity cost of producing one more unit of that good or service. It is calculated as the increase in total ost divided by the increase in output.

Front 10

Comparitive advantage

Back 10

A person or country has a comparitive advantage in a n activity if that person or country can perform the actuvuty at a lower oppurtunity cost than anyone else.

Front 11

Absolute advantage

Back 11

A person has an absolute advantage if that person is more productive than another person.

Front 12

Firm

Back 12

Is an economic unit that hires factors of production and organizes those factors to produce and sell goods and services.

Front 13

Market

Back 13

Is any arrangement that enables buyers and sellers to get information and to do business with each other.

Front 14

Money

Back 14

Is any commodity or token that is generally acceptable as means of payment.

Front 15

Competetive market

Back 15

A market that has many buyers and sellers, so no single buyer or seller can influence the price.

Front 16

Money Price

Back 16

the number of dollars that must be given up on exchange for a good or service

Front 17

relative price

Back 17

The ratio of one price to another (an oppurtunity cost)

Front 18

Law of Demand

Back 18

Other things remaining the same, the higher the price of a good, the smaller is the quantity damanded; and the lower the price of a good, the greater is the quantity demanded.

Front 19

Demand

Back 19

1. Want it
2.Can afford to buy it
3. Plan to buy it

Front 20

Substitute

Back 20

A good that can be used in place of another good.

Front 21

Complement

Back 21

A good that can be used in conjuction with another good.

Front 22

Normal Good

Back 22

One for which demand increases as income increases.

Front 23

Inferior Good

Back 23

One for which demand decreases as income increases.

Front 24

Supply

Back 24

1. Has a resources and Technology to produce it.
2. Can profit from producint it.
3. Plans to produce and sell it

Front 25

Law of Supply

Back 25

Other things remaning the same, the higher the price of a good, the greater the quanitity supplied; and the lower the price of a good,the smaller is the quantity supplied.

Front 26

Equlibrium Price

Back 26

The price at which the quantity demanded equals the quantity supplied.

Front 27

Equlibrium Quantity

Back 27

The Quantity bought and sold at the equlibruim price.

Front 28

Perfectly Elastic demand

Back 28

Demand with an infinite price elasticity; the quantity demanded changes by an infinitely large percentagein response to a tiny price change.

Front 29

Perfectly Inelastic Demand

Back 29

Demand with a price elasticity of Zero; the quantity demanded remains constant when the price changes.

Front 30

Income Elastiity of Demand

Back 30

The responsiveness of demand to a change in income, other things remaining the same. It is calculated as the percentage change in the quantity demnded divided by the percentage change in income.