Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
21 Cards in this Set
- Front
- Back
|
What are the 8 alternative allocation methods? |
Market price; command; majority rule; contest, first-come-served; lottery; personal characteristics; and force. |
|
|
The maximum price willingly paid is ______ ________, so a demand curve is also a _________ ________ curve. |
Marginal benefit, marginal benefit |
|
|
The market demand curve is the ________ sum of the individual demand curves and is the ________ _______ benefit curve. |
Horizontal, marginal social |
|
|
Value is what people are ______ to pay; price is what people ______ pay. |
Willing, must |
|
|
The minimum supply-price is ______ ________, so a supply curve is also a ________ _______ curve. |
Marginal cost, marginal cost |
|
|
The market supply curve is the horizontal sum of the individual _______ ______ and is the ______ ______ cost curve. |
Supply curves, marginal social |
|
|
Cost is what producers _______; price is what producers ________. |
Pay, receive |
|
|
Buyers and sellers acting in their own interest end up benefiting the ______ interest. |
Social |
|
|
Name 6 things that can lead to market failure: |
Price and quantity regulations; taxes and subsidies; externalities; public goods and common resources; monopoly; and high transactions costs |
|
|
Ideas about fairness can be divided into two groups: |
Fair results and fair rules |
|
|
Fair _____ ideas require require income transfers from the rich to the poor. Fair _____ ideas require property rights and voluntary exchange. |
Results, rules |
|
|
What is the effect of a rent ceiling set above the equilibrium rent? |
No effect |
|
|
What is the effect of a rent ceiling set above the equilibrium rent? |
No effect |
|
|
What are the effects of a rent ceiling set below the equilibrium rent? |
A housing shortage, increases search activity, and a black market. |
|
|
What is the effect of a minimum wage set below the equilibrium wage? |
No effect |
|
|
What is the effect of a minimum wage set above the equilibrium wage? |
Unemployment and increased job search |
|
|
What determines the share of tax paid by buyers and sellers? |
Elasticity of demand and elasticity of supply. |
|
|
When do sellers pay the entire tax? |
If demand is perfectly elastic or if supply is perfectly inelastic. |
|
|
When do buyers pay the entire tax? |
If demand is perfectly inelastic or supply is perfectly elastic. |
|
|
What does a production quota lead to? |
Raised prices as a result of inefficient underproduction. |
|
|
What are the results of a subsidy? |
They lower the price, increase the cost of production, and leads to inefficient overproduction. |
