Unit 6 Flashcards Preview

Microeconomics Exam #2 > Unit 6 > Flashcards

Flashcards in Unit 6 Deck (13):
1

Market price:

resource goes to the person who is willing and able to purchase it at the price set in the market

2

Command:

Resources can be allocated through a command system where a person, government, or such makes the decisions about how the resources are allocated

3

Majority rule:

With majority rule, the allocation of resources is, however, the majority chooses to allocate those resources through voting

4

Contest:

With a contest, resource allocation is decided through competition

5

First-come, first-served:

Whoever gets to the resource first can take the resource

6

Sharing equally:

Exactly as it seems—dividing the resource up and divvying it up into equal amounts

7

Lottery:

Leaving the allocation up to chance

8

Personal characteristics:

Giving the resources to the person based on certain personal characteristics

9

Force:

Taking the resources by force; forcing residents to adhere to the redistributive law of the land

10

Markets are said to reach allocative efficiency...

when goods are produced in combinations that match people’s willingness to pay

11

Consumer surplus (CS):

difference between the maximum amount a consumer is willing to pay and the amount that he/she actually has to pay

12

Minimum price a firm needs to charge for another unit is..

the marginal cost (MC) associated with that unit

13

Market forces will pressure the market to where...

MB equals MC (equilibrium)