These definitions are from chapters 1-4 of "Principals of Micro Economics 5th ed" by Robert Frank and Ben Bernanke.
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| 677036932 | Economics | The study of how people make choices under conditions of scarcity and of the results of those choices for society. | 0 | |
| 677036933 | The Scarcity Principal (No-Free-Lunch Principal) | Although we have boundless needs and wants, the resources available to us are limited. So having more of one good thing usually means having less of another | 1 | |
| 677036934 | The Cost-Benefit Principal | An individual (or a firm or a society) should take an action if, and only if, the extra benefits from taking the action are at least as great as the extra costs. | 2 | |
| 677036935 | Rational Person | Someone with well-defined goals who tries to fulfill those goals as be he or she can. | 3 | |
| 677036936 | Economic Surplus | The benefit of taking an action minus its cost. | 4 | |
| 677036937 | Opportunity Cost | The value of what must be forgone to undertake an activity. | 5 | |
| 677036938 | Marginal Cost | The increase in total cost that results from carrying out one additional unit of an activity. | 6 | |
| 677036939 | Marginal Benefit | The increase in total benefit that results from carrying out one additional unit of an activity. | 7 | |
| 677036940 | Average Cost | The total cost of undertaking N units of an activity, divided by N. | 8 | |
| 677036941 | Average Benefit | The total benefit of undertaking N units of an activity, divided by N. | 9 | |
| 677036942 | Normative Economic Principal | One that SAYS how people SHOULD behave. | 10 | |
| 677036943 | Positive Economic Principal | One that PREDICTS how people WILL behave. | 11 | |
| 677036944 | The Incentive Principal | A person (or a firm or a society) is more likely to take an action if its benefit rises, and less likely to take it if its cost rises. **The Incentive Principal is a POSITIVE economic principal. | 12 | |
| 677036945 | Microeconomics | The study of INDIVIDUAL choice under scarcity and its implications for the behavior of prices and quantities in individual markets. | 13 | |
| 677036946 | Macroeconomics | The study of the performance of NATIONAL economies and the policies that governments use to try to improve that performance. | 14 | |
| 677040634 | Equation | A mathematical expression that describes the relationship between two or more variables. | 15 | |
| 677040635 | Variable | A quantity that is free to take a range of different values. | 16 | |
| 677040636 | Dependent Variable | A variable in an equation whose value is determined by the value taken by another variable in the equation. | 17 | |
| 677040637 | Independent Variable | A variable in an equation whose value determines the value taken by another variable in the equation. | 18 | |
| 677040638 | Constant (or parameter) | A quantity that is fixed in a value. | 19 | |
| 677040639 | Vertical Intercept | In a straight line, the value taken by the dependent variable when the independent variable equals zero. | 20 | |
| 677040640 | Slope | In a straight line, the ratio of the vertical distance the straight line travels between any two points (rise) to the corresponding horizontal distance (run). **Simply, the change in Y over the change in X | 21 | |
| 677040641 | Absolute Advantage | One person has an absolute advantage over another if he or she takes fewer hours to perform a task than the other person. | 22 | |
| 677040642 | Comparative Advantage | One person has a comparative advantage over another if his or her opportunity cost of performing a task is lower than the other persons opportunity cost. | 23 | |
| 677040643 | The Principal of Comparative Advantage | Everyone does best when each person (or each country) concentrates on the activities for which his or her opportunity cost is lowest. | 24 | |
| 677040644 | Attainable Point | Any combination of goods that can be produced using currently available resources. | 25 | |
| 677040645 | Unattainable Point | Any combination of goods that cannot be produced using currently available resources. | 26 | |
| 677040646 | Inefficient Point | Any combination of goods for which currently available resources enable an increase in the production of one good without a reduction in the production of another. | 27 | |
| 677040647 | Efficient Point | Any combination of goods for which currently available resources do not allow an increase in the production of one good without a reduction in the production of the other. | 28 | |
| 677040648 | The Principal of Increasing Opportunity Cost (low-hanging-fruit principal) | In expanding the production of any good, first employ those resources with the lowest opportunity cost, and only afterward turn to resources with higher opportunity costs. | 29 | |
| 677041820 | Outsourcing | A term increasingly used to connote having services performed by low-wage workers overseas. | 30 | |
| 677041821 | Market | The market for any good consists of all buyers and sellers of that good. | 31 | |
| 677041822 | Demand Curve | A schedule or graph showing the quantity of a good that buyers wish to buy at each price. | 32 | |
| 677041823 | Substitution Effect | The change in the quantity demanded of a good that results because buyers switch to or from substitutes when the price of the good changes. | 33 | |
| 677041824 | Income Effect | The change in the quantity demanded of a good that results because a change in the price of a good changes to buyer's purchasing power. | 34 | |
| 677043945 | Buyer's Reservation Price | The larges dollar amount the buyer would be willing to pay for a good. | 35 | |
| 677043946 | Supply Curve | A graph or schedule showing the quantity of a good that sellers wish to sell at each price. | 36 | |
| 677043947 | Seller's Reservation Price | The smallest dollar amount for which a seller would be willing to sell an additional unit, generally equal to marginal cost. | 37 | |
| 677043948 | Equilibrium | A balanced or unchanging situation in which all forces at work withing a system are canceled by others. | 38 | |
| 677043949 | Equilibrium and Equilibrium Quantity | The price and quantity at the intersection of the supply and demand curves for the good. | 39 | |
| 677043950 | Market Equilibrium | Occurs in a market when all buyers and sellers are satisfied with their respective quantities at the market place. | 40 | |
| 677043951 | Excess Supply | The amount by which quantity supplied exceeds quantity demanded when the price of a good exceeds the equilibrium price. | 41 | |
| 677043952 | Excess Demand | The amount by which quantity demanded exceeds quantity supplied when the price of a good lies below the equilibrium price. | 42 | |
| 677043953 | Price Ceiling | A maximum allowable price, specified by law. | 43 | |
| 677043954 | Change in the Quantity Demanded | A movement along the demand curve that occurs in response to a change in price. | 44 | |
| 677043955 | Change in Demand | A shift of the entire demand curve. | 45 | |
| 677043956 | Change in the Quantity Supplied | A movement along the supply curve that occurs in response to a change in price. | 46 | |
| 677043957 | Change in Supply | A shift in the entire supply curve. | 47 | |
| 677047736 | Complements | Two goods are complements in consumption if an increase in the price of one causes a leftward shift in the demand curve for the other. (or if a decrease causes a rightward shift) **EXAMPLE: If the price of LETTUCE goes up, you wont be making salads so the demand for SALAD DRESSING goes down. | 48 | |
| 677047737 | Substitutes | Two goods are substitutes in consumption if an increase in the price of one causes a rightward shift in the demand curve for the other. (or if a decrease causes a leftward shift) **EXAMPLE: If the price of COFFEE goes up, you wont be buying coffee so the demand for TEA (or soda or whatever) goes up. | 49 | |
| 677047738 | Normal Good | A good whose demand curve shifts rightward when the incomes of buyers increase and leftward when the incomes of buyers decrease. | 50 | |
| 677047739 | Inferior Good | A good whose demand curve shifts leftward when the incomes of buyers increase and rightward when the incomes of buyers decrease. | 51 | |
| 677047740 | An Increase in Demand will lead to... | An increase in both the equilibrium price and quantity. | 52 | |
| 677047741 | A Decrease in Demand will lead to... | A decrease in both the equilibrium price and quantity. | 53 | |
| 677047742 | An Increase in Supply will lead to... | A decrease in the equilibrium price and an increase in the equilibrium quantity. | 54 | |
| 677047743 | A Decrease in Supply will lead to... | An increase in the equilibrium price and a decrease in the equilibrium quantity. | 55 | |
| 677050091 | Buyer's Surplus | The difference between the buyer's reservation price and the price he or she actually pays. | 56 | |
| 677050092 | Seller's Surplus | The difference between the price received by the seller and his or her reservation price. | 57 | |
| 677050093 | Total Surplus | The difference between the buyer's reservation price and the seller's reservation price. | 58 | |
| 677050094 | Cash on the Table | An economic metaphor for unexploited gains from exchange. | 59 | |
| 677050095 | Socially Optimal Quantity | The quantity of a good that results in the maximum possible economic surplus from producing and consuming the good. | 60 | |
| 677050096 | Efficiency (or economic efficiency) | A condition that occurs when all goods and services are produced and consumed at their respective socially optimal levels. | 61 | |
| 677050097 | The Equilibrium Principal (no-cash-on-table principal) | A market in equilibrium leaves no unexploited opportunities for individuals but may not exploit all gains achievable through collective action. | 62 | |
| 677058896 | Concept of Elasticity | A measure of the extent to which quantity demanded and quantity supplied respond to variations in price, income and other factors. | 63 | |
| 677058897 | Price Elasticity or Demand | The percentage change in the quantity demanded of a good or service that results from a 1% change in its price. | 64 | |
| 677058898 | Price Elasticity of Demand Equation | Percentage Change in Quantity Demanded ___________________________________ Percentage Change in Price | 65 | |
| 677058899 | Elastic | The demand for a good is elastic with respect to price if its price elasticity of demand is GREATER than 1. | 66 | |
| 677058900 | Inelastic | The demand for a good is inelastic with respect to price if its price elasticity of demand is LESS than 1. | 67 | |
| 677058901 | Unit-Elastic | The demand for a good is unit-elastic with respect to price if its price elasticity of demand equals 1. | 68 | |
| 677058902 | Price Elasticity Equation | ∆Quantity Demanded ÷ Original Quantity Demanded ____________________________________________ ∆Price ÷ Original Price of good | 69 | |
| 677058903 | Price Elasticity Equation to find Elasticity at ANY POINT | Price 1 _______________ X __________ Quantity Demanded Slope | 70 | |
| 677058904 | Perfectly Elastic Demand | Demand is perfectly elastic with respect to price if price elasticity of demand is infinite. | 71 | |
| 677058905 | Perfectly Inelastic Demand | Demand is perfectly inelastic with respect to price if price elasticity of demand is zero. | 72 | |
| 677058906 | Total Expenditure = Total Revenue | The dollar amount that consumers spend on a product (Total expenditure P X Q) is equal to the dollar amount that sellers receive.(Total Revenue) | 73 | |
| 677058907 | Cross-Price Elasticity of Demand | The percentage by which the quantity demanded of the first good changes in response to a 1% change in the price of the second. | 74 | |
| 677058908 | Income Elasticity of Demand | The percentage by which quantity demanded changes in response to a 1% change in income. | 75 | |
| 677058909 | Price Elasticity of Supply | The percentage change in quantity supplied tat occurs in response to a 1% change in price. | 76 | |
| 677058910 | Perfectly Inelastic Supply | Supply is perfectly inelastic with respect to price if elasticity is zero. | 77 | |
| 677058911 | Perfectly Elastic Supply | Supply is perfectly elastic with respect to price if elasticity is infinite. | 78 |
