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Midterm 1 Microeconomics
UVU Sorenson
31
Economics
Undergraduate 3
02/04/2012

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Term
Opportunity cost
Definition
the benefits you could have received by taking an alternative action.
Term
Marginal analysis
Definition
An examination of the additional benefits of an activity compared to the additional costs of that activity
Term
Positive Norm
Definition
Positive economics is relatively scientific (testable) and focuses on value-free descriptions of and predictions about economic relationships.


Normative economics deals with values and addresses what should be rather than what is.
Term
Global econ
Definition
generally refers to the economy, which is based on economies of all of the world's countries
Term
Budget line
Definition
represents the various combinations of two goods which can be purchased with a given money income and assumed prices of goods
Term
Resource catagories
Definition
Land, Labor, service/tertiary and quaternary
Term
Law of increaseing opportunity costs
Definition
as production of a product increases, the cost to produce an additional unit of that product increases as well.
Term
Post hoc fallacy
Definition
A causes or caused B because A occurs before B
Term
Command system
Definition
An economy that is planned and controlled by a central administration, as in the former Soviet Union.
Term
Self Interest
Definition
focus on the needs or desires (interests) of oneself
Term
Global perspective chart
Definition
Term
Division of Labor
Definition
specialisation of cooperative labour in specific, circumscribed tasks and like roles
Term
Medium of exchange (use of money)
Definition
intermediary used in trade to avoid the inconveniences of a pure barter system
Term
Consumer sovereignty
Definition
consumers determining the production of goods
Term
2 Koreas
Definition
Term
Markets
Definition
Where buyer and seller come together
Term
Law of Demand
Definition
as the price of a good or service increases, consumer demand for the good or service will decrease and vice versa.
Term
Inferior goods
Definition
A type of good for which demand declines as the level of income or real GDP in the economy increases.
Term
Law of Supply
Definition
all other factors being equal, as the price of a good or service increases, the quantity of goods or services offered by suppliers increases and vice versa.
Term
Supply and Demand graph
Definition
Term
Price Ceiling
Definition
is a government- or group-imposed limit on how high a price can be charged for a product
Term
Price Floor
Definition
is a government- or group-imposed limit on how low a price can be charged for a product
Term
Price elasticity of demand
Definition
is a measure used in economics to show the responsiveness, or elasticity, of the quantity demanded of a good or service to a change in its price
Term
Market period
Definition
you've produced the good, you're not going to produced any more for now, all that remains is to sell it
Term
Global warming
Definition
refers to the current rise in the average temperature of Earth's atmosphere and oceans and its projected continuation
Term
Producer surplus
Definition
is the amount that producers benefit by selling at a market price that is higher than the least that they would be willing to sell for
Term
Producer efficience
Definition
Better allocation of resources
Term
Private goods
Definition
"an item that yields positive benefits to peopleā€[1] that is excludable
Term
Public goods
Definition
Non-rivalry means that consumption of the good by one individual does not reduce availability of the good for consumption by others; and non-excludability means that no one can be effectively excluded from using the good
Term
Externalities
Definition
or transaction spillover, is a cost or benefit not transmitted through prices [1] that is incurred by a party who did not agree to the action causing the cost or benefit.
Term
Coase therom
Definition
if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights. In practice, obstacles to bargaining or poorly defined property rights can prevent Coasian bargaining
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