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30 Cards in this Set
- Front
- Back
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What is the study of the allocation of scarce resources among competing entities?
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economics
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What is a descriptive statement that can be shown to be true or false?
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positive statement
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What is a prescriptive statement describing what ought to be, but cannot be tested?
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normative statement
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What kind of solutions exist for economic problems?
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There are no solutions to economic problems, only tradeoffs
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What is something that you'd rather have some of than none of?
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a good
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What are free goods?
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goods that you can get more of without having to give anything up
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What are economic goods?
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goods that you must give something up in order to get more
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What does TANSTAAFL stand for?
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there ain't no such thing as a free lunch, meaning there are costs associated with everything
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What is the result of scarcity that decides how resources get allocated?
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competition
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What are the 4 forms of competition (also known as methods of discriminating)?
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1.) force or violence
2.) bribery or mutually advantageous exchagne 3.) prejudice 4.) performance |
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What is changing or creating goods and services which increases someone's utility, time of availability, place or form?
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production
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What does it mean when someone has a comparitive advantage over another?
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they have a lower opportunity cost of production
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What is producing more of a good than you intend to consume?
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specialization
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What is a barrier to exchange that can lead to production inefficiency?
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tax
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The cheaper it is to communicate and exchange, the greater the gains from specialization. What is this called?
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extent of the market
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Is it possible to have a comparitive advantage in both goods being produced?
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no, if you're operating efficiently you cannot produce more of one good without producing less of the other
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What is the production possibilities frontier?
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the result of specialization with the low cost producer producing first
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What are property rights?
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the rights of people to the use of goods, includes exclusivity of use and transferability
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What are costs or benefits associated with production or consumption that are not reflected in market prices and fall on parties other than the buyers or sellers?
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spillovers, or externalities
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MCs + MCp > MBp
What does this relationship indicate? |
overproduction
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If the personal marginal benefit is less than the marginal cost to society plus the personal marginal cost, what is indicated?
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overproduction
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MCp < MBp + MBs
What does this relationship indicate? |
underproduction
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If the personal marginal cost is less than the personal marginal benefit plus the marginal benefit to society, what is indicated?
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underproduction
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What is trying to get a return in excess of cost called?
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economic rent seeking
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What is it called when everybody uses a common resource until the value of the common property dwindles to zero?
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trajedy of the commons
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What is the best example of a public good?
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knowledge
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What are the two qualties of a public good?
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1.) consumption by one individual does not reduce the ability of others to consume the good
2.) nonexcludability |
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What has public good characteristics but does not provide substantial benefits to the community as a whole?
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pseudo public good
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What is it called when the cost of knowing something is greater than the benefits of knowing?
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rational ignorance
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What is trying to get the government to change the rules to benefit one group at the expense of others called?
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political rent seeking
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