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46 Cards in this Set
- Front
- Back
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Scarcity |
having a limited resource |
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Opportunity Cost |
What you give up for something else |
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Absolute Advantage |
Can produce or make more of the good |
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Comparative Advantage |
Has the least opportunity cost for making the good |
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Command Economy |
An economy that prices and supply are set by the government |
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Market Economy |
An economy that prices and supply is fully deteremined by the sellers |
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Mixed Economy |
An economy with characteristics of both a market and a command economy |
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Traditional Economy |
An economy with traditional ways of handling goods and services |
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Law of demand |
as price goes up, quantity demanded decreases |
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Law of Supply |
as prices go up, quantity supplied uncreases |
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Determinants of Demand |
Tastes, Related goods, Income, Buyers, Expectations T.R.I.B.E. |
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Subsitutes |
as the price of good a increase the demand for good b increases |
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Complements |
as price of good a increases the demand for good b decreases |
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Determinants of Supply |
Technology, Inputs, Expectations, Sellers T.I.E.S |
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Elasticity |
how much the price reacts to a change in the price |
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Normal Good |
as income increase you buy more of the good |
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Inferior Good |
as income increases you buy less of the good |
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Consumer surplus |
how much the customer is willing to pay minus the actual price |
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Producer suplus |
how much the seller is willing to pay in cost minus the actual supply |
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Allocative Effieciency |
Using all of your resources to the best ability |
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Utility |
measure of preferences over some set of goods and services |
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Diminishing Marginal Utility |
Is the point when earning that extra dollar doesn't give as much utility as someone else |
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Production Funtion |
Is the relationship with input and outputs |
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Diminishing Retuns |
Is the point when it starts to cost more because for every additional good |
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Economies of Scale |
You are producing below your equilibrium price and quantity so you can hire more workers |
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Accounting Profit |
revenue minus explicit cost |
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Economic Profit |
revenue minus explicit and implicit costs
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Profit Maximization
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is trying to make the most revenue where cost is the lowest |
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Perfect Competition |
There is many sellers who have equal control over the market
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Monopoly |
There is one seller controls the market |
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Monopsony |
is when one company has power of the labor market |
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Oligopoly |
is when a few sellers control the market |
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Collusion/Cartel |
is when oligopoly work together and act as a monopoly |
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Game theroy |
is when someone offers both sides a compromise and the right decision is to do nothing |
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Dominant Strategy |
Is the stategy that leads to the best outcome for that one person |
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Nash Equilibrium |
is where to dominant strategies meet |
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Monopolistic Competition |
Has traits of both perfect competition and monopoly |
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Derived Demand |
Demand for factors of production |
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Marginal Revenue Product |
change in quantity divided by the total revenue |
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Externalities |
consequence that effect a third party |
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Public Good |
No rival and not excludable |
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Private Good |
There is a rival and it is excludable |
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Common Resource |
There is a rival but its not excludable |
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Club Good |
There is no rival but it is excludable |
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Lorenz Curve |
the relationship with income and weath distribution |
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Gini Coefficient |
number that represents the income distibution |
