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eco105 > midterm > Flashcards

midterm Flashcards

(71 cards)

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1
Q

scarcity

A

the problem that arises from our limited money, time, and energy

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2
Q

economics

A

how individuals, businesses, and governments make the best possible choices to get what they want, and how those choices interact in markets

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3
Q

opportunity cost

A

the cost of the best alternative given up

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4
Q

incentives

A

rewards and penalties for choices

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5
Q

production possibilities frontier

A

maximum cominations of products or services that can be produced with existing inputs

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6
Q

absolute advantage

A

the ability to produce a product or service at a lower absolute cost than another producer

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7
Q

comparative advantage

A

the ability to produce a product or service at a lower opportunity cost than another producer

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8
Q

model

A

a simplified representation of the real world, focusing attention on what’s important for understanding

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9
Q

inputs

A

the productive resources- labour, natural resources, capital equipment, and entrepreneurial ability- used to produce products and services

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10
Q

positive statements

A

about what is: can be evaluated as true or false by checking the facts

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11
Q

normative statements

A

about what you believe should be: involve value judgements

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12
Q

microeconomics

A

analyzes choices that individuals in households, individual businesses, and governments make, and how those choices interact in markets

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13
Q

macroeconomics

A

analyzes performance of the whole Canadian economy an global economy, the combined outcomes of all individual microeconomic choices

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14
Q

marginal benefits

A

additional benefits from the next choice

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15
Q

marginal opportunity costs

A

additional opportunity costs from the next choice

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16
Q

implicit costs

A

opportunity costs of investing your own money or time

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17
Q

negative (or positive) externalities

A

costs (or benefits) that affect others external to a choice or a trade

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18
Q

demand

A

consermers’ willingness and ability to par for a particular product or service

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19
Q

marginal benefit

A

the additional benefit from a choice, changing with circumstances

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20
Q

quantity demanded

A

amount you actually plan to buy at a given price

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21
Q

market demand

A

sum of demands of all individuals willing and able to buy a particular product or service

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22
Q

law of demand

A

if the price of a product or service rises, quantity demanded decreases, other things remaining the same

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23
Q

demand curve

A

shows the relationship between price and quantity demanded, other things remaining the same

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24
Q

increase in demand

A

increase in consumers’ willingness and ability to pay

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25
decrease in demand
decrease in consumers' willingness and ability to pay
26
substitutes
products or services used inplace of each other to satisfy the same want
27
complements
products or services used together to satisfy the same want
28
normal goods
products or services you buy more of when your income increases
29
inferior goods
products or serviecs you buy less of when your income increases
30
marginal cost
additional opportunity cost of increasing quantity supplied, changing with circumstances
31
sunk costs
past expenses that cannot be recovered
32
supply
businesses' willingness to produce a particular product or service because price covers all opportunity costs
33
quantity supplied
the quantity you actually plan to supply at a given price
34
marginal opportunity cost
complete term for any cost relevant to a smart decision
35
market supply
sum of supplies of all businesses willig to produce a particular product or service
36
law of supply
if the price of a product or service rises, quantity supplied increases
37
supply curve
shows relationship between price and quantity supplied, other things remaining the same
38
increase in supply
increase in businesses' willingness to supply; rightward shift of supply curve
39
decrease in supply
decrease in business's willingness to produce; leftward shift of supply curve
40
market
the interactions between buyers and sellers
41
property rights
legally enforceable guarantees of ownership of physical, financial, and intellectual property
42
shortage or excess demand
quantity demaded exceeds quantity supplied
43
surplus or excess supply
quantity supplied exceeds quantity demanded
44
market-clearing price
the price that equalizes quantity demanded and quantity supplied
45
equilibrium price
the price that equalizes quantity demanded and quantity supplied, balancing the forces of competition and cooperation, so that there is no tendency for change
46
comparitive statics
comparing two equilibrium outcomes to isolate the effect of changing one factor at a time
47
consumer surplus
the difference between the amount a consumer is willing and able to pay, and the price actually paid
48
producer surplus
the difference between the amount a producer is willing to accept, and the price actually received
49
total surplus
consumer surplus plus producer surplus
50
deadweight loss
the decrease intotal surplus compared to an economically efficient outcome
51
efficient market outcome
consumers buy only products and services where marginal benefit is greater than marginal cost; products and services produced at lowest cost with price just covering all opportunity costs of production
52
elasticity (or price elasticity of demand)
measures by how much quantity demanded responds to a change in price
53
inelastic demand
small response in quantity demanded when price rises
54
elastic demand
large response in quantity demanded when price rises
55
perfectly inelastic demand
price elasticity of demand equals zero; quantity demanded does not respond to a change in price
56
perfectly elastic demand
price elasticity of demand equals infinity; quantity demanded has an infinite response to any change in price
57
total revenue
al money a business receives from sales, equal to price per unit (P) multiplied by quantity sold (Q)
58
elasticity of supply
measures by how much quantity supplied responds to a change in price
59
inelastic supply
small response in quantity supplied when price rises
60
elastic supply
large response in quantity supplied when price rises
61
perfectly inelastic supply
price elasticity of supply equals zero; quantity supplied does not respond to a change in price
62
perfectly elastic supply
price elasticity of supply equals infinity; quantity supplied has infinity response to a change in price
63
cross elasticity of demand
measures the responsiveness of the demand for a product of service to a change in the price of a substitute or complement
64
income elasticity of demand
measures the respinsiveness of the demand for a product or service to a change in income
65
income inelstic demand
for normal goods that are necessities, the percentage change in quantity is less than the percentage change in income
66
income elastic demand
for normal goods that are luxuries, the percentage change in quantity is greater than the percentage change in income
67
tax incidence
the division of a tax between buyers and sellers
68
Elasticity of supply =
% change in quantity supplied/% change in price
69
First key
Additional benefits vs. Opportunity costs
70
Second key
Additional benefits and costs
71
Key 3:
Implicit costs and externalities

eco105 (1 decks)

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