Quiz #13 Vocab Flashcards Preview

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Flashcards in Quiz #13 Vocab Deck (14):

Theoretical good for which there isn't upward sloping demand curve: as the price rises, so does the quantity demanded

Giffen good


Holding all other factors or conditions constant so as to see the impact of changing only one variable

Ceteris Parabis


As the price of a good decreases, consumers feel' richer' and can afford more of it

Income effect


As the price of a good decreases, a consumer may buy more of this good relative a more expensive substitute good

Substitution effect


The optimal point for society when any further improvement for one group must come at the expense of another group

Pareto efficiency


Public goods with private goods characteristics: they maybe price excludable or share distributive characteristics

Quasi-public goods


In the short run, a firm will suspend operations when the selling price does not cover average variable cost

Shut down criterion


The level of output where the firms marginal revenue equals marginal cost

Profit maximizing criterion


Market situations where the consumer is better served by a well regulated monopoly: competition would prevent the benefit of economics of sale

Natural monopolies


The quotation mark cost quotation mark of time spent waiting in lines or in other forms of congestion on trying to acquire a good or service; typically associated with shortages or bad customer service

Queuing cost


Term used for the price of capital or productive machinery

Rental rate


Concept that all businesses exist in order to make money or turn a profit

Profit motive


A process of reallocating wealth from higher earners to lower ones



The act of buyers and sellers engaging in trade of their own free will and each receiving some kind of game in the process

Voluntary exchange