Command

Majority

Contest

First Come

Lottery

Personal Characteristics

Force 

Marginal Benifit

Value of one more unit of good

Measured on demand curve 

Value (Marginal Benifit) of a good minus the price paid for the good

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Supply Curve

aka 

Price/Quantity Reguations------------underproduction

Taxes/Subidies---------------under/over

Externalitites-----------------------------------under

Public Goods/Common Resources-------overproduction 

Monopoly------------------------Underproduction

HighTransaction Costs ----------Underproduction

Strive to achieve greatest good for greatest # of ppl

tradeoff b/t effieciency and fairness

Taxes rich lessens motivation to earn money

Admin costs to taxation 

Private property rights are enforces and if voluntary exchange takes place in competative markets and if there is no....

price/quantity regulations

taxes/substities

externalities

monopolies

common resources/ public goods

high transaction costs 

Units free measurement of responsiveness of the quantity demanded of a good to a change in price

%^in quantity demanded / %^ in price

Price of good*Quantity sold

if elastic 1% decrease in price increases quan by more than 1% TR increases

if inelastic 1% decrease in price increases quan by less  than 1% TR decreases

if unit elastic 1% decrease in price increases quant by 1%

closeness of Substitues

Proportions of time

Time elaspeses since price change 

Cross-Elascity def, formula

and 

positive for __________

negative for __________

Measurement of response of demand to a change in price of another good

%^ in quantity demanded / %^ in price

 positive for complement (move the same dir)

negative for substitute (move diff direction) 

Income Elasticity

def, formula and three cases 

measurement of responsiveness of demand for a good to a change in  income

%^ in quanitity demanded / %^ in income

e>1   [good normal elastic]

0<e<1[good normal inelastic]

e<0[good inferior] 

Elastcity of Supply

def, formula

factors that influence 

Measures responsivness of suppy to a change in the price of a good

%^ quantity supplied / %^ in price

Factors that influence

-resources substitution

-time frame for supply decision 

Want it

 Can afford it

Plan to buy it 

Demand

def 

Any other factor that influences an increase in demand

-Price of a related good(complement/substitute)

-Expected future price

-Income(normal/inferior)

-Expected future income

-Populatation

-Preferences 

Has the resources/technology to produce

Can profit form producing it

Plans to produceit

Any other factor influencing supply

The Prices of resources used to produce the good

The prices of related goods produced(complements/subsitutes)

Expected future prices

The number of supplier

Technology 

1.  What goods and services are produced

2. How goods and services are produced

(Factors of production)

3. For whom goods and services are produced

-land earns rent

-labour earns wage

-capital earns intrest

-entrepreneurship earns profit

An allocation is Pareto efficient if it is not Pareto inefficient

It is Pareto inefficient if we can make an improveent

Is when we produce that particular mix of goods and services most wanted by society

Point on the PPF that is preferred above all other points. 

Technological Change

Capital accumulation 

Property rights- govrn ownership, use, and dispoal of resources, goods, or services

Markets- any arrangement that enables buyers and sellers to get information and do business with each other, there are two types of markets goods markets where goods and services are bought and sold and factor markets where factors of production are bought and sold