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Flashcards in Lecture 2 Deck (19)
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1

What is the principle of voluntary exchange

The idea that no one enters into a transaction without in making them better off in some way

2

What are examples of principle of voluntary exchange

Does bill gates mow his own yard?

3

What is Microeconmics?

The study of the economic on a smaller micro scale
Looking at individual markets
Looking at something like ie coffee industry in New Mexico

4

What is the technically definition of utility?

The capacity of a commodity or a service to satisfy some human want. The amount of benefit an individual gets from consuming a product or receiving a service

5

Everyone gets benefit from consuming a good but the exact amount for each person is unknown. Is this true?

Yes

6

What is marginal utility?

What is gained from adding on one small piece of extra utility

7

What is opportunity cost?

What is given up for what is wanted

8

What's the objective of a firm?

To Maximize profit

9

What is profit?

Financial benefit that is realized when the revenue gained outweighs the business cost

10

What is accounting profit

Revenue less the explicit monetary paints for things used in the produced process

11

What is economic cost

The amount of profit made above and beyond the next alternative

12

How to firms make profit?

Convert inputs into produce

13

What is the factors of producetio?

Google me

14

Five groups of production

Natural resources
Labor
Physical capital
Human capital
Entrepreneurship

15

What is an economic model?

An abstraction from reality that allow us to focus on what really matters

16

What is a variable?

A measure of something that can take on different values

17

What is a relationship?

A connection association or involvement
I.e when price goes up quantity demanded goes down

18

What is an assumption

A proposition that is taken for granted

19

Define creteris paribus?

A Latin expression meaning that all other variables are held fixed
Focusing on one thing at a time