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11 Cards in this Set

  • Front
  • Back
Normal goods
a good for which a rise in income increases the demand for that good- "the normal case'. i.e. BMW
inferior goods
a good for which a rise in income decreases the demand for a good. i.e. top ramen
quota rent
the difference between the demand price nad the supply price at the quota limit. this difference the earning that accrue otthe license holder, is equal to the market price of the licnse when the license is traded.
the upper limit, set by the government, on the quantity of some good that can be bought or sold; also referred to as a quantity control.
Quoto Limit
The total amount of a good under a quota or quantity control that can be legally transacted.
excise tax
A tax on the consumption of a given good or service
calculating opportunity costs
rise over the run
it costs ----x to make ----y
positive economics
the way the economy DOES work
normative economics
the way the economy SHOULD work
absolute advantage
produce a good more efficiently than all others
Comparitive Advantage
produce a good at a lower oportunity cost than another producer