Details Title: 2106 Sandifer Description: Test 2 Total Flash Cards: 26 Created: 10/15/2007 17:47:55		New Users: To study from this flashcard set, or to create your own your own study flash cards, REGISTER HERE. Existing Users: CLICK HERE. Additional Economics Flashcards
Cards in this set: Term Definition Term price ceiling Definition a legal maximum on the pirice at which a good can be sold Term price floor Definition a legal minimum on the price at which a good can be sold Term tax incidence Definition the manner in which the burden of a tax is shared among participants in a market Term willingness to pay Definition the maximum amount that a buyer will pay for a good Term producer surplus Definition the amount a seller is paid for a good minus the sellers cost of providing it Term efficiency Definition the property of a resource allocation of maximizing the total surplus by all members of society Term equity Definition the fairness of the distribution of well-being among the members of society Term externality Definition the uncompensated impact of one person's actions on the well-being of a bystander Term coase theorem Definition the propostition that if private parties can bargain without cost over the allocation of resources, they can solve the problem of externalities on their own Term excludability Definition the property of a good whereby a person can be prevented from using it Term rivalry in consumption Definition the property of a good whereby one person's use diminishes other peoples use Term private goods Definition goods that are both excludable and rival in consumption Term public goods Definition goods that are neither excludable nor rival in consumption Term free rider Definition a person who receives the benefit of a good but avoids paying for it Term total revenue Definition the amount a firm receives for the sale of its output Term total cost Definition the market calue of the inputs a firm uses in production (TC) Term profit Definition total revenue minus total cost Term economic profit Definition total revenue minus total cost, including both explicit and implicit costs Term accounting profit Definition total revenue minus total explicit cost Term productin function Definition the relationship between quantity of inputs used to make a good and the quantity of output of that good Term average total cost Definition total cost divided by the quantity of output (ATC = TC/Q) Term average fixed cost Definition fixed costs divided by the quantity of output (AFC = FC/Q) Term average variable cost Definition variable costs divided by the quantity of output (AVC = VC/Q) Term marginal cost Definition the increase in total cost that arised from an extra unit of production (MC = changeTC/ change Q) Term efficient scale Definition the quantity of output that minimizes average total cost