Part Two

Question 1

Common Market

Answer 1

An economic territory with the absence of internal tariffs, a common external tariff, and factor mobility.

Question 2

Communism

Answer 2

The liberation of the people from the burdens of liberty.

Question 3

Comparative Advantage

Answer 3

Something that A (one person or country) does better than B (another person or country) relative to everything else that A does. (See absolute advantage)

Question 4

Complementary Goods

Answer 4

When the use of one good requires the use of another; i.e., they are mutually dependent. (See substitution good, factor good, and interdependent markets)

Question 5

Concave vs. Convex

Answer 5

A description of a curvilinear function as per its relationship to a point of reference. A bowl is concave relative to the ceiling, but convex relative to the table it sits on. The lunar surface is convex from the perspective of the earth, but concave relative to the center of the moon. (See Note of Geometric Terms and Operations)

Question 6

Conspicuous Consumption

Answer 6

Thorstein Veblen’s thesis that some goods are preferred to others because of their social implications; i.e., that prestige is afforded as a function of price. (See affectation and reverse substitution effect)

Question 7

Constant Costs

Answer 7

Marginal costs (per unit) that remain the same regardless of the number of units produced.

Question 8

Consultant

Answer 8

1: An expert who is hired to support a decision that has already been made, 2: A guru who knows that you can’t solve the problem until you know whose problem it is, 3: A jobless person who sows executives how to work

Question 9

Consumer Price Line

Answer 9

The average revenue function; the demand curve.

Question 10

Consumer Surplus

Answer 10

Utility received, but not paid for.

Question 11

Consumption Good

Answer 11

A good or service used by the household sector. (See investment good)

Question 12

Contract

Answer 12

An enforceable agreement; i.e., an understanding between two or ore parties that entitles an aggrieved party to present a dispute to the trier of fact in a court of law. (See elements of a contract)

Question 13

Conventional Wisdom

Answer 13

That which is believed by the common fools.

Question 14

Corporate Culture

Answer 14

One of the supreme oxymorons of our time

Question 15

Corporation

Answer 15

A business organization (entity) having a legal status, with liability limited to the assets of the corporation. (See proprietorship)

Question 16

Cost-Push Inflation

Answer 16

When factor shortages raise marginal costs and thereby push prices up the aggregate demand function. (See demand-pull inflation)

Question 17

Counterpart Funds

Answer 17

Soft currency of de minimis value that is used to offset commodity transfers between nations; e.g., the payment of taka by Bangladesh to the United States in exchange for the shipment of food

Question 18

Credit Card

Answer 18

A plastic passport to the valley of the shadow of debt.

Question 19

Customs Duty

Answer 19

A tax on imports; i.e., a tariff

Question 20

Customs Union

Answer 20

An economic partnership with an absence of internal tariffs and a common external tariff.

Question 21

Cycles

Answer 21

A succession of periodically recurring events. (See business cycle)

Question 22

Cynic

Answer 22

Someone who know the price of everything and the value of nothing

Question 23

Debt

Answer 23

An ingenious substitute for the chain and whip

Question 24

Deductive Logic

Answer 24

Reasoning from the general to the particular. The use of an internally consistent hypothesis. (See methodology and inductive logic)

Question 25

Demand

Answer 25

Both the ability and willingness to enter the market at some specific price. (See effective demand)

Question 26

Demand-Pull Inflation

Answer 26

When deficit spending pulls prices up the aggregate supply function; i.e., more dollars are chasing the same quantity of goods. (See cost-push inflation)

Question 27

Demography

Answer 27

The study of populations

Question 28

Dialectic

Answer 28

Plato's system of inductive logic that begins with a thesis (an initial assumption of reality) tempered by an antithesis (an observed exception) to form a synthesis (the new thesis). (See Hegelian logic and dialectical materialism)

Question 29

Dialectical Materialism

Answer 29

The Marxian application of Hegelian logic to the study of economic history. (See dialectic and Hegelian logic)

Question 30

Differentiated Products

Answer 30

Competitive goods made different by physical characteristics or distinguished by advertising. (See homogeneous products)

Question 31

Diminishing Returns

Answer 31

Decreasing returns to the variable factor. (See law of diminishing returns)

Question 32

Distribution Theory

Answer 32

A model that explains for whom the economy produces. (See feudalism, Marxism, and meritocracy)

Question 33

Doctrine

Answer 33

Used in economics, especially during the 19th century, as a synonym for theory; i.e., a scientific principle or prediction. (See theory)

Question 34

DOJ

Answer 34

Department of Justice

Question 35

Duopoly

Answer 35

Two producers

Question 36

Dutch Auction

Answer 36

A reverse auction, where the offering price begins high and proceeds down until there is a buyer

Question 37

Dynamics

Answer 37

An analysis which considers all significant variables over a timer series. (See statics)

Question 38

Econometrics

Answer 38

The combined use of statistical methods and mathematical economics to measure, estimate, and forecast quantitative economic relationships, variables, and outcomes. (See mathematical economics)

Question 39

Economic Good

Answer 39

A good (tangible product) or service (intangible commodity).

Question 40

Economic Good vs. Free Good

Answer 40

Carl Menger's distinction between a good which a scarce (an economic good) and therefore commands a price, and one that is not scare and therefore is free.

Question 41

Economic History

Answer 41

The study of history in terms of economic causes and effects; e.g. The Industrial Revolution, The Potato Famine, The Gold Rush, etc. (See history of economic thought and megaeconomics)

Question 42

Economic Rent

Answer 42

A payment to a factor of production. (See quasi rent)

Question 43

Economics

Answer 43

1: The study of scarcity, 2: The study of natural laws, 3: The metaphysics of accounting, 4: A counter-intuitive thought process for comprehending social order

Question 44

Economist

Answer 44

1: Someone who does it with models, 2: Someone who gets rich explaining why others are poor, 3: Someone who sees something work in practice and asks if it would work in theory, 4: Someone who won't sell his children because he believes that their market value will increase in the future

Question 45

Economists

Answer 45

1: A large group of academics, it laid end to end, would not reach a conclusion, 2: A small group of academics who refuse to speak English so that no one can understand them

Question 46

Economy vs. Efficiency

Answer 46

To economize it to minimize inputs with the given output. To make efficient is to maximize output with the given inputs.

Question 47

Educational Vouchers

Answer 47

States issued tuition warrants permitting parents to enroll their children at the school of their choice, public or private.

Question 48

Effective Demand

Answer 48

Both the ability and willingness to pay the current market price. (See demand)

Question 49

Elasticity

Answer 49

Responsiveness of a dependent variable to a change in a independent variable. In economics, Q=f(p)

Question 50

Elements of a Contract

Answer 50

The necessary conditions of an enforceable agreement i.e., offer (proposal), acceptance (affirmative notification), and consideration (quid pro quo). (See contract)