Principles Of Microeconomics- Gregory Mankiw

Front 1

What are the first 5 Principles of Economics?

Back 1

1. People face trade-offs
2. The cost of something is what you give up to get it
3. Rational people think at the margin: this means that people do the best to achieve their goals, given the available opportunities.
4. People Respond to Incentives
5. Trade can make everyone better off.

Front 2

What are the last 5 Principles of Economics?

Back 2

1. Markets are usually a good way to organize economic activity.
2. Government can sometimes improve market outcomes.
3. A country’s standard of living depends on its ability to produce goods and services.
4. Prices rise when the government prints too much money
5. Society faces a short-run tradeoff between inflation and unemployment.

Front 3

Scarcity?

Back 3

The limited nature of society's resources.

Front 4

Economics?

Back 4

The study of how society manages its scarce resources.

Front 5

Efficiency?

Back 5

The property of society getting the most it can from its scarce resources.

Front 6

Equality?

Back 6

The property of distributing economic prosperity uniformly among the members of society.

Front 7

Opportunity Cost?

Back 7

Whatever must be given up to obtain some item.

Front 8

Rational People?

Back 8

People who systematically and purposefully do the best they can to achieve their objectives.

Front 9

Marginal Changes?

Back 9

Small incremental adjustments to a plan of action.

Front 10

Incentive?

Back 10

Something that induces a person to act.

Front 11

Market Economy?

Back 11

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.

Front 12

Property rights?

Back 12

The ability of an individual to own and exercise control over scarce resources.

Front 13

Market Failure?

Back 13

A situation in which a market left on its own fails to allocate resources efficiently.

Front 14

Externality?

Back 14

The impact of one person's actions on the wellbeing of a bystander.

Front 15

Market Power?

Back 15

The ability of a single economic actor (or a small group of actors) to have a substantial influence on market prices.

Front 16

Productivity?

Back 16

The quantity of goods and services produced from each unit of labor.

Front 17

Inflation?

Back 17

An increase in the overall level of prices in the economy.

Front 18

Business Cycle?

Back 18

Fluctuations in economics activity, such as employment and production.

Front 19

Circular-flow Diagram?

Back 19

A visual model of the economy that shows how dollars flow through markets among households and firms.

Front 20

Production possibilities frontier?

Back 20

A graph that shows the combinations of output that the economy can possible produce given the available factors of production and the available production technology.

Front 21

Microeconomics?

Back 21

The study of how households and firms make decisions and how they interact in markets.

Front 22

Macroeconomics?

Back 22

The study of economy-wide phenomena, including inflation, unemployment and economy growth.

Front 23

Positive statements?

Back 23

Claims that attempt to describe the world as it is.

Front 24

Normative statements?

Back 24

Claims that attempt to prescribe how the world should be.

Front 25

Market?

Back 25

A group of buyers and sellers of a particular good or service.

Front 26

Competitive market?

Back 26

A market in which there are many buyers and many sellers so that each has a negligible impact on the market price.

Front 27

Quantity Demanded?

Back 27

The amount of a good that buyers are willing and able to purchase.

Front 28

Law of Demand?

Back 28

The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises.

Front 29

Demand Schedule?

Back 29

A table that shows the relationship between the price of a good and the quantity demanded.

Front 30

Demand Curve?

Back 30

A graph of the relationship between the price of a good and the quantity demanded.

Front 31

Normal good?

Back 31

A good for which , other things equal, an increase in income leads to an increase in demand.

Front 32

Inferior good?

Back 32

A good for which, other things equal, an increase in income leads to a decrease in demand.

Front 33

Substitutes?

Back 33

Two goods for which an increase in the price of one leads to an increase in the demand for the other.

Front 34

Complements?

Back 34

Two goods for which an increase in the price of one leads to a decrease in the demand for the other.

Front 35

Quantity supplied?

Back 35

The amount of a good that sellers are willing and able to sell.

Front 36

Law of Supply?

Back 36

The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises.

Front 37

Equilibrium?

Back 37

A situation in which the market price has reached the level at which quantity supplied equals quantity demanded.

Front 38

Surplus?

Back 38

A situation in which quantity supplied is greater than quantity demanded.

Front 39

Shortage?

Back 39

A situation in which quantity demanded is greater than quantity supplied.

Front 40

Law of Supply and Demand?

Back 40

The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance.

Front 41

Elasticity?

Back 41

A measure of the responsiveness of quantity demanded or quantity supplied to one of its determinants.

Front 42

Price Elasticity of Demand?

Back 42

A measure of how much the quantity demanded of a good responds to a change in the price of that good, computer as the percentage change in quantity demanded divided by the percentage change in price.

Front 43

Total Revenue?

Back 43

The amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold.

Front 44

Income Elasticity of Demand?

Back 44

A measure of how much the quantity demanded of a good responds to a change in consumers income, computed as the percentage change in quantity demanded divided by the percentage change in quantity demanded divided by the percentage change in income.

Front 45

Cross-price Elasticity of Demand?

Back 45

A measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in the price of the second good.

Front 46

Price elasticity of supply?

Back 46

A measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price.

Front 47

Price Ceiling?

Back 47

A legal maximum on the price at which a good can be sold.

Front 48

Price Floor?

Back 48

A legal minimum on the price at which a good can be sold.

Front 49

Tax Incidence?

Back 49

The manner in which the burden of a tax is shared among participants in the market.