Micro Definitions Flashcards
(17 cards)
Scarcity
The concept that individuals, firms, govt’s have unlimited wants with limited resources to satisfy those wants
Economics
“The study of” of decisions given scarce resources
Opportunity Costs
The “highest valued alternative” is given up when making a decision
Utility
Desirability of goods or service (g/s)
Marginal Utility
Additionability of ONE additional unity
Value
The intensity of desirability
Price
Desirability of a g/s is right now
Desirability of a g/s where or when
IT IS NOT satisfactional
Price discrimination
Desirability to sit or observe in a different location.
Desirability price for the same product
Increase intensity = price goes up
Productive efficiency
Allocating scarce resources to produce at the lowest possible cost (ATC)
Allocating efficiency
Since all resources are scarce, allocate them according to “consumer’s preference”
Invention
“The first time around”
Innovation
“The practical application” of an invention EX: Henry Ford innovated the assembly line
Technology
“Processes” of turning input into output
Positive analysis
“As it is” -> numbers oriented EX: 2+2=4
Normative analysis
“As it should be” -> preachers and politicians
Productive possibility frontier (PPF)
A curve that shows the maximum combination of goods given available resources and current technology
Increasing marginal opportunity costs
Adding more increases at a smaller rate over time
