Micro Economics 56 And 10

Front 1

externadities

Back 1

• Move and Side effects on someone not making that decision to consume or produce

• can be positive or negative

Front 2

Negative externalities

Back 2

• Left alone in the market will produce too much

• the social cost is is greater than the private cost and

Front 3

Market efficient

Back 3

When there is a positive externalities and consumption free market will produce too little

Front 4

Private good

Back 4

Any good which is excluable and rival

• Mall

Front 5

Common resources

Back 5

Any goods which are not excludable and rival

Front 6

quasi public

Back 6

Any good which is excludable and non rival

Front 7

Public goods

Back 7

Any good to which is not excludable and non rival

Front 8

Elastic demand

Back 8

• as price increases revenues decrease and as price decreases revenue increases

Front 9

Utility

Back 9

• enjoyment and satisfaction from the good or service

• how much are gonna use it

And is measured in utils

Front 10

Law of diminishing marginal utility

Back 10

• as consumption increases satisfaction per additional unit decreases

Front 11

Budget constraint

Back 11

• limited amount of income to spend on goods and services

• need to balance and income utility from different goods

Front 12

Full demand curve

Back 12

Some of all individual quantities at a given price

Front 13

Marginal utility

Back 13

• decreases

Front 14

Social influence on decision-making

Back 14

• celebrity endorsements

•peers

Fairness and morals

• brand names

Front 15

Sunk cost

Back 15

• the cost that has already been paid and cannot be recovered

Front 16

Course theorem

Back 16

Private bargaining will lead to efficient solutions to externalit problems

Front 17

Price discrimination

Back 17

• charging different prices for the same product

• depends on different willingness to pay

Front 18

Perfect price discrimination

Back 18

Charging the exact willingness to pay for each person which will maximize profit and gets rid of consumer surplus

Front 19

Firm

Back 19

Organization that produces goods or services

Front 20

Technology

Back 20

Process to turn inputs and two outputs

Front 21

Total cost

Back 21

The fixed cost plus the variable cost

Front 22

Fixed cost

Back 22

Does not vary with outputs regardless of how much we produce

Front 23

The variable cost

Back 23

varys with outputs and is prone to change

Front 24

Explicit

Back 24

Actual spend money

Front 25

Implicit

Back 25

Opportunity costs

Front 26

Production

Back 26

More workers equals more output at a declining rate

Front 27

Marginal product of labor

Back 27

Additional output from one more worker

Front 28

Law of diminishing returns

Back 28

Adding more input will causes product of labor to decline

· margiinal increases change in total cost from producing one additional unit

Front 29

economies of scale

Back 29

·long run average cost falls as we increase production

·purchase inputs at lower costs

·specialization

·infrastructure

·technology

Front 30

Government policy to deal with negative externalities

Back 30

· Add a tax equal to the externality cost

Front 31

Government policy to deal with positive externalities

Back 31

Give a subsidy equal to the externalites benefits

Front 32

Rivalry

Back 32

If a person has a good the other does not

Front 33

Excludability

Back 33

exclude someone from consuming