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Macroeconomics
N/A
60
Economics
Undergraduate 1
09/22/2010

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Term
Market
Definition
A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
Term
Market
Definition
A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
Term
Market
Definition
A group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade.
Term
Marginal Analysis
Definition
Involves comparing marginal benefits and marginal costs.
Term
Trade-off
Definition
The idea that because of scarcity, producing more of one good or service means producing less of another good or service.
Term
Opportunity Cost
Definition
The highest-valued alternative that must be given up to engage in an activity.
Term
Centrally Planned Economy
Definition
An economy in which the government decides how economic resources will be allocated.
Term
Market Economy
Definition
An economy in which the decisions of households and firms interacting in markets allocate economic resources.
Term
Mixed Economy
Definition
An economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in the allocation of resources.
Term
Productive Efficiency
Definition
The situation in which a good or service is produced at the lowest possible cost.
Term
Allocative Efficiency
Definition
A state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it.
Term
Voluntary Exchange
Definition
A situation that occurs in markets when both the buyer and seller of a product are made better off by the transaction.
Term
Equity
Definition
The fair distribution of economic benefits.
Term
Economic Variable
Definition
Something measurable that can have different values, such as the wages of software programmers.
Term
Positive Analysis
Definition
Analysis concerned with what is.
Term
Normative Analysis
Definition
Analysis concerned with what ought to be.
Term
Production Possibilities Frontier
Definition
A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.
Term
Economic Growth
Definition
The ability of the economy to produce increasing quantities of goods and services.
Term
Trade
Definition
The act of buying or selling.
Term
Absolute Advantage
Definition
The ability of an individual, firm, or a country to produce more of a good or service than competitors, using the same amount of resources.
Term
Comparative Advantage
Definition
The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.
Term
Product Markets
Definition
Markets for goods.
Term
Factor Markets
Definition
Markets for the factors of production, such as labor, capital, natural resources, and entrepreneurial ability.
Term
Factors of Production
Definition
The inputs used to make goods and services.
Term
Entrepreneur
Definition
Someone who operates a business, bringing together the factors of production to produce goods and services.
Term
Property Rights
Definition
Refer to the rights individuals or firms have to the exclusive use of their property, including the right to buy or sell it.
Term
Ceteris Paribus
Definition
The requirement that when analyzing the relationship between two variables - such as price and quantity demanded - other variables must be held constant.
Term
Competitive Market Equilibrium
Definition
A market equilibrium with many buyers and many sellers.
Term
Complements
Definition
Goods and services that are used together.
Term
Demand Curve
Definition
A curve that shows the relationship between the price of a product and the price quantity of the product demanded.
Term
Demand Schedule
Definition
A tabled showing the relationship between the price of a product and the quantity of the product demanded.
Term
Demographics
Definition
The characteristics of a population with respect to age, race, and gender.
Term
Income Effect
Definition
The change in the quantity demanded of a good that results from the effect of a change in the good's price on consumers' purchasing power.
Term
Inferior Good
Definition
A good for which the demand increases as income falls, and decreases as income rises.
Term
Law of Demand
Definition
The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of that product will decrease.
Term
Law of Supply
Definition
The rule that, holding everything else constant, increases in price cause increases in the quantity supplied, and decreases in price cause decreases in the quantity supplied.
Term
Market Demand
Definition
The demand by all the consumers of a given good or service.
Term
Market Equilibrium
Definition
A situation in which quantity demanded equals quantity supplied.
Term
Normal Good
Definition
A good for which the demand increases as income rises and decreases as income falls.
Term
Perfectly Competitive Market
Definition
A market that meets the conditions of (1) many buyers and sellers, (2) all firms selling identical products, and (3) no barriers to new firms entering the market.
Term
Quantity Demanded
Definition
The amount of a good or service that a consumer is willing and able to purchase at a given price.
Term
Quantity Supplied
Definition
The amount of a good or service that a firm is wiling and able to supply at a given price.
Term
Shortage
Definition
A situation in which the quantity demanded is greater than the quantity supplied.
Term
Substitutes
Definition
Good and services that can be used for the same purpose.
Term
Substitution Effect
Definition
The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods that are substitutes.
Term
Supply Curve
Definition
A curve that shows the relationship between the price of a product and the quantity of the product supplied.
Term
Technological Change
Definition
A positive or negative change in the ability of a firm to produce a given level of output with a given quantity of inputs.
Term
Black Market
Definition
A market in which buying and selling take place at prices that violate government price regulations.
Term
Consumer Surplus
Definition
The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays.
Term
Deadweight Loss
Definition
The reduction in economic surplus resulting from a market not being in competitive equilibrium.
Term
Black Market
Definition
A market in which buying and selling take place at prices that violate government price regulations.
Term
Consumer Surplus
Definition
The difference between the highest price a consumer is willing to pay for a good or service and the price the consumer actually pays.
Term
Economic Efficiency
Definition
A market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumer surplus and producer surplus is at a maximum.
Term
Economic Surplus
Definition
The sum of consumer surplus and producer surplus.
Term
Marginal Benefit
Definition
The additional benefit to a consumer from consuming one more unit of a good or service.
Term
Marginal Cost
Definition
The additional cost to a firm of producing one more unit of a good or service.
Term
Price Ceiling
Definition
A legally determined maximum price that sellers may charge.
Term
Price Floor
Definition
A legally determined minimum price that sellers may receive.
Term
Producer Surplus
Definition
The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives.
Term
Tax Incidence
Definition
The actual division of the burden of the tax between buyers and sellers in a market.
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