Shared Flashcard Set

Details

Microeconomics Test 1
University of Arkansas Stapp Micro Test 1
30
Economics
Undergraduate 1
03/02/2011

Additional Economics Flashcards

 


 

Cards

Term
Economics
Definition
The study of how mankind allocates its relatively scare resources to satisfy its virtually insatiable wants
Term
Demand
Definition
maximum price consumers are willing to pay for a quantity of goods and services
Term
Supply
Definition
minimum price a producer must receive for a quantity of goods and services
Term
Inferior Goods
Definition
as income goes up we cut them away
E.X. Ramon Noodles
Term
Relative Price
Definition
Price of an object compared to price of other related goods that perform the same task or service
Term
Substitutes
Definition
Items that are different but serve the same purpose
E.X. Chicken/beef
Term
Implicit
Definition
Relationship between variables is implied
Term
Explicit
Definition
Shows exact relationship between variables
Term
Real Income
Definition
The actual goods you take home
Term
Nominal Income
Definition
The number on your pay check
Term
Indexation
Definition
Max rise of nominal income with rising price of goods and services
Term
Income Effect
Definition
If nominal income does not increase with rise price of object you cannot buy goods and services because real income decreased
Term
Compliments
Definition
To get full value of one item, you must have the other item
E.X. Toothbrush and toothpaste
Term
Priced Out
Definition
Consumer will not buy anything above that price
Term
Saturation Point
Definition
Consumer will not take anymore of the product even if free
Term
Resources
Definition
Land, labor, capital, entrepreneurial talent
Term
Direct Relationship
Definition
As one rises so does other
Term
Indirect Relationship
Definition
As one rises, other falls
Term
Substitution Effect
Definition
If you buy one item that serves a purpose you will not by a similar item that serves the same purpose. Therefore, if price of one goes up (meat), you are more likely to buy substitute (chicken)
Term
Contagen affect
Definition
If price of compliment goes up, sale of other product goes down.
Term
Trading Triangle
Definition
Both consumers and producers happy, transactions happen
Term
Equilibrium
Definition
Intersection of supply and demand. Most efficient point.
Term
Surplus
Definition
Extra supply, happens above the equilibrium, prices go down.
Term
Shortage
Definition
low supply, causing high demand, prices go up
Term
What causes a movement along demand line?
Definition
Increase or decrease in quantity demanded/ price
Term
Demand Shifters (5)
Definition
Income, number of buyers, expectations of higher prices, taste and preferences, and price of substitutes and compliments
Term
Supply Shifters (5)
Definition
Costs, number of sellers, Technology, Expectations, government regulations
Term
Free Market
Definition
Market adjusts to deal with bad prices and surplus.
Term
Consumer Surplus
Definition
Amount of money willing to pay but did not have to
Term
Producer Surplus
Definition
Amount of money the producer receives over and above what they needed to make.
Supporting users have an ad free experience!