Term
| Your opportunity cost of going to a movie is ? |
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Definition
| the total cash expenditure needed to go to the movie plus the value of your time. |
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Term
| Economics is best defined as the study of |
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Definition
| how society manages its scarce resources. |
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Term
| A marginal change is one that |
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Definition
| incrementally alters an existing plan. |
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Term
| Adam Smith’s phrase “invisible hand” refers to |
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Definition
| the ability of free markets to reach desirable outcomes, despite the self-interest of market participants. |
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Term
| Governments may intervene in a market economy in order to |
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Definition
1. Protect property rights.
2. Correct a market failure due to externalities.
3. Achieve a more equal distribution of income. |
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Term
| If a nation has high and persistent inflation, the most likely explanation is |
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Definition
| the central bank creating excessive amounts of money. |
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Term
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Definition
| society is getting the maximum benefits from its scarce resources |
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Term
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Definition
| benefits are distributed uniformly among society’s members |
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Term
| Who is being taxed when more money is printed? |
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Definition
| Anyone who is holding money |
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Term
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Definition
| the limited nature of society’s resources |
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Term
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Definition
| study of how society manages its scarce resources |
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Term
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Definition
| when society gets the most from its scarce resources |
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Term
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Definition
| when prosperity is distributed uniformly among society’s members |
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Term
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Definition
| systematically and purposefully do the best they can to achieve their objectives. |
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Term
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Definition
| incremental adjustments to an existing plan. |
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Term
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Definition
| something that induces a person to act, i.e. the prospect of a reward or punishment |
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Term
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Definition
| a group of buyers and sellers |
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Term
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Definition
| allocates resources through the decentralized decisions of many households and firms as they interact in markets |
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Term
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Definition
| when the market fails to allocate society’s resources efficiently |
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Term
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Definition
when the production or consumption
of a good affects bystanders |
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Term
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Definition
| a single buyer or seller has substantial influence on market price |
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Term
| Govt may alter market outcome to |
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Definition
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Term
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Definition
| the amount of goods and services produced per unit of labor |
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Term
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Definition
| increases in the general level of prices |
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Term
You are trying to decide whether to take a vacation. Most of the costs of the vacation (airfare, hotel, and forgone wages) are measured in dollars, but the benefits of the vacation are psychological.
How can you compare the benefits to the costs? |
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Definition
| Determine the benefits of what you give up by going on the vacation, and compare them to the benefits of going on vacation. |
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Term
Propositions about Which Most
Economists Agree |
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Definition
gap between Social Security funds and expenditures
large federal budget deficit has an adverse effect on the economy.
minimum wage increases unemployment among young and unskilled workers
Effluent taxes and marketable pollution permits represent a better approach to pollution control |
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Term
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Definition
Economists often give conflicting policy advice.
about the validity of alternative positive theories about the world.
different values and, therefore, different normative views about what policy should try to accomplish. |
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Term
| If opp. cost remains constant, PPF is a |
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Definition
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Term
| If opp. cost of a good rises as more of the good is produced, PPF is |
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Definition
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