Vocab

Question 1

Marginal cost

Answer 1

Cost to produce one additional unit

Question 2

Cost-benefit principle

Answer 2

Actions should only be taken if benefits outweigh costs

Question 3

Marginal benefit

Answer 3

Maximum amount a consumer is willing to pay

Question 4

Ppf

Answer 4

Max amount 2 goods/services can be produced at once

Question 5

Law of demand

Answer 5

Price increases demand decreases vice versa

Question 6

Inferior good

Answer 6

Decreased demand when income is high

Question 7

Normal good

Answer 7

Income and demand increase together

Question 8

Luxury goods

Answer 8

Buy more of when income increases

Question 9

Interdependence

Answer 9

Firms rely on eachother

Question 10

Equilibrium

Answer 10

Supply and demand meet

Question 11

Shortage

Answer 11

Demand exceeds quantity

Question 12

Surplus

Answer 12

Quantity exceeds demand

Question 13

Positive elasticity

Answer 13

Income increases so does purchasing

Question 14

Negative elasticity

Answer 14

Decreased demand when price increases

Question 15

Elasticity equal to 0

Answer 15

Inelastic

Question 16

Elasticity equal to 1+

Answer 16

Elastic

Question 17

Economic burden

Answer 17

How tax is shared

Question 18

Subsidy

Answer 18

Benefit given

Question 19

Tax

Answer 19

Govt regulated money

Question 20

Burden of tax

Answer 20

Who pays

Question 21

Free market

Answer 21

Prices based on supply and demand

Question 22

Positive analysis

Answer 22

Analysis based on facts and data

Question 23

Normative analysis

Answer 23

Analysis based on opinions and values

Question 24

Reservation price

Answer 24

Max price willing to pay

Question 25

DWL

Answer 25

Cost cure when supply ≠ demand

Question 26

Efficient outcome

Answer 26

Maximized benefits

Question 27

Efficient quantity

Answer 27

Msc = msb

Question 28

Rivalrous

Answer 28

1 person using = 1 less for everyone else

Question 29

Excludable

Answer 29

Limited to those who pay for it

Question 30

Non-excludable

Answer 30

Available for everyone

Question 31

Private

Answer 31

Excludable and rivalrous

Question 32

Public

Answer 32

Non excludable non rivalrous

Question 33

Competitive market price

Answer 33

Similar pricing to others

Question 34

Derived demand

Answer 34

Demand as a result of another variables demand

Question 35

Labour supply

Answer 35

Total hours willing to work

Question 36

Mrp

Answer 36

Revenue of one additional unit

Question 37

Competitive labour market

Answer 37

Wage rate determined by supply and demand

Question 38

Profit maximizing firm

Answer 38

MR = MC

Question 39

Market power

Answer 39

Ability to manipulate prices above competitive levels

Question 40

Short run

Answer 40

1 thing fixed while others vary

Question 41

Long run

Answer 41

No fixed factors

Question 42

Single price monopolist

Answer 42

Must sell each unit of its good for the same price

Question 43

Perfectly competitive

Answer 43

All suppliers are equal and so is supply and demand

Question 44

Positive profit

Answer 44

Earning more revenue than total costs

Question 45

Free entry

Answer 45

Can enter if they see good opportunity

Question 46

Implicit costs

Answer 46

Variables, opportunities

Question 47

Explicit costs

Answer 47

Out of pocket fixed costs

Question 48

Atc

Answer 48

Relationship between cost per unit and level of output

Question 49

Economic profit

Answer 49

Tr-explicit and implicit

Question 50

Perfect price discrimination

Answer 50

Charging each customer the max theyre willing to pay

Question 51

Nash equilibrium

Answer 51

Best response based off current knowledge

Question 52

Prisoner dilemma

Answer 52

Nash eq example

Question 53

Sealed bids

Answer 53

Bids made w/o knowing others

Question 54

Cooperative outcome

Answer 54

Most mutual benefit

Question 55

Payoff matrix

Answer 55

Diagram of all possibilities

Question 56

Dominant strategy

Answer 56

Best option regardless of opponent

Question 57

Tragedy of commons

Answer 57

Depletion of shared resource, due to over exploitation

Question 58

Willingness to pay

Answer 58

How much they expect to pay