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Details Title: Final Exam Description: Ch. 11, 13-17 Total Flash Cards: 49 Created: 12/10/2006 19:19:47	To study from this set of flash cards, or to create your own your own study flash cards, register HERE. If you are already a registered user, CLICK HERE.
Cards Term excludabilty Definition the property of a good whereby a person can be pervented from using it Term rivalry in consumption Definition the property of a good whereby one person's use diminishes other people's 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 common resources Definition goods that are rival in consumption but not excludable Term free rider Definition a person who receives the benefit of a good but avoids paying for it Term cost-benefit analysis Definition a study that compases the costs and benefits to society of providing a public good Term tragedy of the commons Definition a parable that illustrates why commom resources get used more than is desirable from the standpoint of society as a whole Term marginal tax rate Definition the tax rate applied to each additional dollar of income Term payroll tax (social insurance tax) Definition a tax on wages that a firm pays its workers Term corporation Definition business that is set up as a separate legal intity Term excise taxes Definition taxes on a specific goods like gasoline, cigarettes, and alcoholic beverages. or small items such as estate taxes and cutoms duties Term transfer payment Definition a government payment not made in exchange for a good or service Term budget deficit Definition an excess of government spending over government receipts Term budget surplus Definition an excess of government receipts over government spending Term total revenue Definition the amount a firm receives for the sale of is output Term total cost Definition the market value of the inputs a firm uses in production Term profit Definition total revenue minus total cost Term explicit costs Definition input costs that require an outlay of money by the firm Term implicit costs Definition input costs tha do not require an outlay of money by the firm Term accounting profit Definition total revenue minus total explicit cost Term production function Definition the relationship betwen quantity of inputs used to make a good and the quantity of outputs of that good Term marginal product Definition the increase in output that arises from an additional unit of input Term diminishing marginal product Definition the property whereby the marginal product of an input declines as the quantity of the input increases Term fixed costs Definition costs tha do not vary with the quantity of output produced Term economic profit Definition total revenue minus total cost, including boh explicit and implicit costs Term average total cost Definition total cost divided by the quantity Term average fixed cost Definition fixed costs divided by the quantit of output Term average variable cost Definition variable costs divided by the quantity of output Term marginal cost Definition the increase in total cost that arises from an extra unit of production Term efficient scale Definition the quantity of output that minimizes average total cost Term economies of scale Definition the property whereby long-run average total cost falls as the quantity of output increases Term diseconomies of scale Definition the property whereby long-run average total cost rises as the quanity of output increases Term constant returns to scale Definition the property whereby long-run average total cost stays the same as the quantity of output changes Term competitive market Definition a market with may buyers and sellers trading indentical products so that each buyer and seller is a price taker Term average revenue Definition total revenue divided by the quantity sold Term marginal revenue Definition the change in total revenue from an additional unit sold Term sunk cost Definition a cost that has already been commmitted and cannot be recovered Term monopoly Definition a firm that is the sole seller of a product without close substitutes Term natural monopoly Definition a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms Term oligopoly Definition a market structure in which only a few sellers offer simialr or idential products Term monopolistic competition Definition a market sturcture in which many firms sell products that similar but not identical Term collusion Definition an agreement amoung firms in the market about quanities to produce or prices to change Term cartel Definition a group of firms acting in unison Term Nash equilbrium Definition a situation in which economic participants interacting with one another each choose their best strategy given the strategies that all the others have chosen Term game theory Definition the study of how people behave in strategic situations Term prisoners' delemma Definition a particular "game" between two captured prisoners that illustrates why cooperations is difficult to maintain even when it is mutally beneficial Term dominant strategy Definition a strategy that is best for a player in a game regardless of the strategies chosen by the other players Term monopolistic competition Definition a market structure in which many firms sell products that are similar but not identical