Shared Flashcard Set

Details

Microeconomics CH 15
Vocab
15
Economics
Undergraduate 1
04/28/2009

Additional Economics Flashcards

 


 

Cards

Term
Economic Rent
Definition
The price paid for the use of land and other natural resources, the supply of which is fixed (perfectly inelastic).
Term
Incentive Function (of price)
Definition
The inducement that an increase in the price of a commodity gives to sellers to make more available (and conversely for a decrease in price), and the inducement that an increase in price offers to buyers to purchase smaller quantities (and conversely for a decrease in price).
Term
Single-Tax Movement
Definition
The idea that economic rent could be heavily taxed, or even taxed away, without diminishing the availabile supply of land or, therefore, the productive potential economy as a whole.
Term
Lonable Funds Theory of Interest
Definition
The concept that the supply of and demand for lonable funds determine the equilibrium rate of interest.
Term
Pure Rate of Interest
Definition
An essentially risk-free, long-term interest rate that is free of the influence of market imperfections.
Term
Nominal Interest Rate
Definition
The amount of money received by a worker per unit of time (hour, day, etc.); money wage.
Term
Real Interest Rate
Definition
The interest rate expressed in dollars of constant value (adjusted for inflation) and equal to the nominal interest rate less the expected rate of inflation.
Term
Usury Laws
Definition
State laws that specify the maximum legal interest rate at which loans cna be made.
Term
Explicit Costs
Definition
The monetary payment a firm must make to an outsider to obtain a resource.
Term
Implicit Costs
Definition
The monetary income a firm sacrifices when it uses a resource it owns rather than supplying the resource in the market; equal to what the resource could have earned in the best paying alternative employment; includes normal profit.
Term
Economic or Pure Profit
Definition
The total revenue of a firm less its economic costs (which include both explicit costs and implicit costs); also called "pure profit" and "above-normal profit."
Term
Normal Profit
Definition
The payment made by a firm to obtain and retain entrepreneurial ability; the minimum income entrepreneurial ability must receive to induce it to perform entrepreneurial functions for a firm.
Term
Static Economy
Definition
A hypothetical economy in which the basic forces such as resource supplies, technological knowledge and consumer tastes are constant and unchanging.
Term
Insurable Risks
Definition
An event that would result in a loss but whose frequency of occurence can be estimated with considerable accuracy. Insurance companiees are willing to sell insurance against such losses.
Term
Uninsurable Risks
Definition
An event that wo uld result in a loss and whose occurrence is uncontrollable and unpredictable. Insurance companies are not willing to sell insurance against such a loss.
Supporting users have an ad free experience!