Term
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Definition
Opp cost from 1 unit increase
The marginal cost is what you must give up to get one additonal unit of it. |
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Term
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Definition
| benefit that arises from a one unit increase in an activity |
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Term
| economics use NORMATIVE/POSITIVE statements. and what is the defintion of the correct answer? |
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Definition
they use positive statements, which is what is.
they do not use normative statements which is what out to be. |
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Term
| 5 core ideas of economic thinking |
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Definition
1. people make rational choices by comparing costs and benefits
2. cost is what you must give up
3. benefit is what you gain when you get something and is measued by what you are willing to give up to get it
4. a rational choice is on the margin
5. choices respond to incentives(carrots) |
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Term
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Definition
| goods and services that are bought by individuals and used to provide personal enjoyment and and contribution to the a person's quality of life. |
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Term
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Definition
goods that are bought by businesses to increase their productive resources.
to help a bness make more chedda |
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Term
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Definition
| income earned by an entrepreneur for running a business |
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Term
| production possibilities frontier |
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Definition
| the boundry between the combinations of goods and services that can be produced. also combinations that cannot be produced, given the available factors of production&technology. |
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Term
| production possiblities frontier |
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Definition
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Term
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Definition
a situation in which we cannot produce more of one good or service w/o producing less of something else.
-production is efficient when the economy is getting all it can from its resources.
-economy can produce at any point inside the ppf
-outside is unattinable. |
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Term
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Definition
| the ability of a person to perform an activity (good or service) at a lower opportunity cost than someone else. |
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Term
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Definition
| when one person is more productive than another person in several or all activities. |
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Term
| how do people gain from specialization of trade? |
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Definition
1. person has a comparative advanage - he or she can perform that activity at a lower opportunity cost than someone else.
2. people gain by increasing the production of the item in which they have a comparative advantage and trading. |
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Term
| what makes production possibilities expand? |
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Definition
-technological change
-increase in capital and human capital expand production possibilites
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Term
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Definition
| other things remaining the same, if the price of a good rises, the quanity demanded of that good decreases; and if the price of a good falls, the quanity of that good increases |
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Term
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Definition
| the relationship between the quanittiy demanded and the price of a good when all other influences on buying plans remain the same. |
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Term
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Definition
| the amount of any food, serivce, or resource that people are willing and able to buy during a specified period at a specified price. |
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Term
demand schedule
demand curve |
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Definition
demand schedule: a list of the qty demanded at each different price (all other things remaining the same)
demand curve: graph of the relationship between qty demanded of a good and its price (all other things remaning the same) |
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Term
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Definition
| the sum of the demands of all the buyers in the market |
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Term
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Definition
| a change in the qty that people plan to buy when any influence on buying plans, other than price, of the good changes. |
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Term
| what are some influences on change in demand? |
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Definition
- price of related goods (complements & subs)
- income
- expectations
- number of buyers
- preferences
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Term
| How does the change of the price in a substitute influence? |
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Definition
-demand for a good increases if price of its substitutes rises. Demand decreases if price of sub falls.
-move in same direction. |
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Term
| How does the price of a complement influence? |
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Definition
-demand for a good decreases if the price of its complements rises. demand for a good increases if its price rises.
-move in opposite directions |
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Term
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Definition
-A good for which demand increases when income increases
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Term
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Definition
- a good for which demand decreases when income increases
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Term
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Definition
| a change in the qty demanded of a good that people plan to buy that results from a change in the price of the good w/ all other influences remaning the same. |
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Term
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Definition
the amount of any good/service/resource that people are willing able to to sell
-specific peiord of time at a specific price
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Term
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Definition
a list of the qty supplied
at each different price
all other influences remaining the same |
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Term
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Definition
| a graph of the relationship between the qty supplied of a good and its price, all other influences remaining the same |
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Term
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Definition
| the sum of the supplies of all the sellers in the market |
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Term
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Definition
Total cost per unit of output, which equals average fixed cost plus avarage variable cost.
FIXED+VARIABLE |
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Term
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Definition
| Total fixed cost per unit of output. |
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Term
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Definition
| Total variable cost per unit of output |
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Term
| To produce more output in the short run, a firm must employ more of... |
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Definition
workers (its variable factors of production)
cannot change: technology & qty of capital
"the time frame in which qty of some resources are fixed. in the short run, a firm can usually change the qty of labor it uses but not its technolog and quantity of capital. " |
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Term
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Definition
| The cost of all the factors of production used by a firm. |
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Term
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Definition
A method of estimating the price elasticty of demand by observing the change in total revenue that reuts from a price change (all other influences remaining same).
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Term
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Definition
| TOtal cost for labor per each additional unit outputed. |
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Term
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Definition
The cost of the firm's:
variable factor of production: labor
Hence; the cost of labor. |
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Term
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Definition
The total cost per unit of output.
Equals: avg. fixed cost+avg. variable cost |
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Term
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Definition
When PRICE equals MIN. AVG VARIABLE COST.
The qty produced is that at what is being produces when avg. variable cost is at its minimum. |
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