| 6767382195 | positive economics | describes the way things are (description and explanation of economic phenomena. It focuses on facts and cause-and-effect behavioral relationships and includes the development and testing of economics theories.) | | 0 |
| 6767392910 | normative economics | descirbes the way things should be (expresses value or normative judgments about economic fairness or what the outcome of the economy or goals of public policy ought to be.) | | 1 |
| 6767400269 | Economics | the study of how to allocate scarce resources among competing ends | | 2 |
| 6767405229 | Scarcity | occurs due to our unlimited wants, such as goods and servicez, with limited resources, such as limited ability to produce or limited time | | 3 |
| 6767413865 | labor | the physical and mental effort of people | | 4 |
| 6767419875 | inputs/factors of production | the resources that are used in the production process | | 5 |
| 6767422681 | human capital | knowledge and skills acquired through training and experience | | 6 |
| 6767428241 | entrepreneurship | the ability to identify oppurtunities and organize production, and the willgness to accept risk in the pursuit of reward | | 7 |
| 6767435398 | natural resources/land | refers to any productive resource exsisting in nature, including wild plants, mineral deposits, wind, and water | | 8 |
| 6767441488 | capital | manufactured goods that can be used in production process, including tools, equipment, buildings, and machinery | | 9 |
| 6767449841 | oppurtunity cost | the value of the best alternative sacrafice as compared to what actually takes place (i.e. for the resources we use to produce one product, the oppurtunity cost is that we cannot produce another good or service) | | 10 |
| 6767468574 | production-possibilites frontier | choices an economy faces and the oppurtuniy cost of making one good rather than another | | 11 |
| 6767480616 | efficiency | economy is using all of its resources productively | | 12 |
| 6767507503 | division of labor | permits people to develop expertise in the task that they concentrate on (practice improves performance); specialization | | 13 |
| 6767514694 | absolute advantage | a situation where a country can produce a good using fewer resources per unit of output than another country | | 14 |
| 6767524289 | comparative advantage | a situation where a country can produce a good at a lower oppurtunity cost (smaller loss in terms of production of another good) than another country | | 15 |
| 6767543931 | allocative efficiency (efficiency in output) | a state of the economy in which production represents consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to consumers equal to the marginal cost of producing | | 16 |
| 6767553083 | marginal cost | the cost or additional cost of producing one more unit | | 17 |
| 6767555893 | marginal benefit | the value or additional value of producing one more unit | | 18 |
| 6767561804 | technical efficiency/efficiency in production | refers to how productive a business can be given the fewest inputs, or resources, necessary to do the job | | 19 |
| 6767571237 | wage | the price of labor | | 20 |
| 6767572829 | rental rate | price of capital | | 21 |
| 6767585133 | marginal product of labor | the additional output produced by one more unit of labor | | 22 |
| 6767587720 | marginal product of capital | the additional output produced by one more unit of capital | | 23 |
| 6767575496 | cost-minimizing production | condition that requires the wage to be divided by the rental rate of capital equal the marginal product of labor divided by the marginal product of capital | | 24 |
| 6767590282 | distributive efficiency/efficiency in exchange | goods and services are received by those who have the greatest need for them, or by those who place the highest relative value on goods recieve them (achieved when consumers make purchases that maximize their satisfaction/utility given their budgetary contstraints) | | 25 |
| 6767619303 | marginal rate of substitution | the rate at which a consumer is ready to give up one good in exchange for another good while maintaining the same level of utility | | 26 |
| 6767623932 | communism | a system designed to minimize imbalance in wealth via the collective ownership of property, single political party divys up the wealth | | 27 |
| 6767660055 | socialism | wages are determined by negotiations between trade unions and managers and a single political party does not rule the economy, but similar to capitalism | | 28 |
| 6767678047 | capitalist system | private individuals control the factors of production and operate them in pursuit of profit | | 29 |
| 6767682024 | demand curve | relationship between price and the quantity demanded of a good within a given period | | 30 |
| 6767689071 | demand schedule | a table of the quantity demanded of a good at different price levels (able to determine quantity demanded) | | 31 |
| 6767696904 | law of diminishing marginal utility | decreasing satisfaction gained from additional units of a good consumed in a given period | | 32 |
| 6767703804 | law of demand | as the price of a good rises, the quantity of that good demanded by consumers falls | | 33 |
| 6767711015 | supply curve | relationship between price and quantity supplied of a good in a period of time | | 34 |
| 6767715525 | supply schedule | a table that shows the relationship between the price of a good and the quantity supplied | | 35 |
| 6767719793 | law of supply | as the price increases, the quantity of a good supplied in a given period will increase, other factors being equal | | 36 |
| 6767729074 | market supply curve | indicates the total quantities of a good that suppliers are willing and able to provide at various prices during a given period of time | | 37 |
| 6767738664 | change in demand | a movement of the equilibrium along a stationary demand curve | | 38 |
| 6767743963 | shifters of demand | TRIBE: tastes/prefereces, related good prices, income of buyers, # of buyers, expectations for the future
expanded version: change in tastes/preferences, increase in price of substitute goods, decrease in price of complements, increase in income for normal goods, decrease in income for inferior goods, increase in number of buyers, expectation of higher future income, expectation of higher future prices, expectation of future shortages, lower taxes or higher subsidies, regulations that promote use
*remember: demand curve shifts to the right for an increase and left for a decrease | | 39 |
| 6767785340 | normal good | one that the consumer buys more of when income increases | | 40 |
| 6767787991 | inferior good | one that the consumer buys more of when income decreases | | 41 |
| 6767792968 | consumption smoothing | the economic concept used to express the desire of people to have a stable path of consumption | | 42 |
| 6767802206 | shifters of supply | ROTTEN: resource costs, other goods' prices (subs and joint products), taxes and subsidides, technology changes, expectations of suppliers, number of suppliers
expanded version: a decrease in input costs, and improvement of technology, expectations of lower prices in the future, an increase in the number of sellers, a decrease in the price of a "substitute in production", an increase in the price of "joint product", lower taxes or higher subsidies, less restrictive regulations
*remember: supply curve shifts to the right for an increase and left for a decrease | | 43 |
| 6767830749 | joint products | multiple products generated by a single production process at the same time (i.e. lumber and wood mulch, leather and beef) | | 44 |
| 6767841962 | supply and demand shifts at the same time | equilibrium price OR quantity will be certain, other will depend on the relative size of the shifts; do not know the relative size of the shifts so you can say that the change is indeterminant | | 45 |
| 6767863692 | price ceiling | an artificial cap on the price of a good | | 46 |
| 6767872641 | queuing cost | the time lost waiting in line, unnecessary if the price were able to reach equilibrium where # of buyers equaled the number of tickets available (refer to page 52 for full explanation) | | 47 |
| 6767884914 | black market transactions | illegal transactions, not counted toward a country's GDP (ie selling drugs) | | 48 |
| 6767867405 | price floor | an artificially imposed minimum price | | 49 |
| 6767893701 | minimum wage | the price floor on the price of labor | | 50 |
| 6767898384 | marginal utility | the additional utility gained from consuming one more unit of a good | | 51 |
| 6767906260 | principle of diminishing marginal utility | suggests that as one conumes more and more of a good, the additional satisfaction gained from the subsequent units (MU) decreases | | 52 |
| 6767902791 | total utility | found by adding the marginal utility values gained from each of the units consumed; the total satisfaction received from consuming a given total quantity of a good or service | | 53 |
| 6767916799 | consumer surplus | the value recieved from the purchase of a goods in excess of what is paid for it ( the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount the actually do pay) | | 54 |
| 6767936219 | producer surplus | the difference between the price a seller recieves for a good and the minimum price for which she would be willing to supply a quantity of the good (an economic measure of the difference between the amount a producer of a good receives and the minimum amount the producer is willing to accept for the good) | | 55 |
| 6767953779 | elasticity | the responsiveness to various changes | | 56 |
| 6767956240 | price elasticity of demand | the responsiveness of the quantity demanded of a good to price changes | | 57 |
| 6767966885 | factors of increase for elasticity of a good's demand | PAID: proportion of income spent on the good, availability of close substitutes, importance of the food (luxury vs. necessity), delay--ability to delay purchase of the good
expanded version: the numner of close substitutes, the proportion of incomce spent on the good, time, the lack of importance of the good | | 58 |
| 6767983414 | luxury | goods with an elastic demand | | 59 |
| 6767989914 | unit elastic | where the percentage change in quantity demanded equals the percentage change in price of the demanded good, then demanded good is labeled "unit elastic" | | 60 |
| 6767998412 | inelastic | where the percentage change in quantity demanded is less than the percentage change in price, demand=inelastic | | 61 |
| 6768003072 | necessity | a good that is catergorized based on its inelastic demand | | 62 |
| 6768019880 | elasticity of supply | measures the responsiveness of the quantity supplied to price changes | | 63 |
| 6768040497 | income elasticity of demand | measures the responsiveness of the quantity demanded to changes in income | | 64 |
| 6768047788 | cross-price elasticity of demand | measures the responsiveness of quantity demanded of one good to the price of another | | 65 |
| 6768051318 | complements | two goods for which an increase in the price of one leads to a decrease in the demand for another (i.e. peanut butter and jelly); inverse relationship between price and demand | | 66 |
| 6768062284 | substitutes | two goods for which an increase in the price of one leads to an increase in the demand for the other (i.e. flip flops and sandals) | | 67 |
| 6768074839 | deadweight loss/excess burden of tax | the fall in total surplus that results from a market distortion, such as tax | | 68 |
| 6786369752 | marginal product | the additional output produced per period when one more unit of input is added, holding the other inputs constant | | 69 |
| 6786374586 | law of diminishing marginal returns | as the amount of one input increased, holding that amounts of all other inputs constant, the incremental gains in output (marginal returns) will eventually decrease | | 70 |
| 6786379699 | total product curve | shows the relationship between the total amount of output produced and the number of units of an input used, holding the amounts of other inputs constant | | 71 |
| 6786383652 | fixed costs | costs that do not change, when more output is produced | | 72 |
| 6786384509 | variable costs | costs that do change when more output is produced | | 73 |
| 6786385959 | total costs | =total fixed costs+total variable costs | | 74 |
| 6786389651 | marginal cost | the amount by which costs increase when one more unit of output is produced | | 75 |
| 6786406603 | long run | ability to change the amount of capital and other inputs in the long run has repercussions for both long and short run curves, everything is variable in the long run--there is no fixed cost; lower marginal costs | | 76 |
| 6786406604 | short run | the amount of at least one input (aka factor of production) cannot change, firms can neither enter nor leave in this situation; marginal costs will be higher if the fixed amount of capital held in the short run is more or less the minimizing amount for producing the desired quantity of output | | 77 |
| 6786423222 | economies of scale | enjoyed over the range of output where the long-run average cost curve slopes downward, meaning the cost per unit is falling; can result from increasing returns to sale, from the use of equipment, from the cost of inputs (long run phenomenon) | | 78 |
| 6786435106 | diseconomies of scale | exist over the range of output where LRAC (long run average cost curve) is increasing | | 79 |
| 6786439876 | increasing returns (to scale) | exist when output increases (proportionately) more than increases in all inputs | | 80 |
| 6786444930 | decreasing returns (to scale) | exist when output increases (proportionately) less than increases in all inputs | | 81 |
| 6786447910 | constant returns (to scale) | exist when output increases in proportion to increases in all inputs | | 82 |
| 6786453239 | diminishing (marginal) returns | exist when an additional unit of an input increases total ooutput by less than the previous unit of the input, holding all other inputs constant (short run phenomenon) | | 83 |
| 6786459234 | increasing cost firm | a firm facing decreasing returns to scale, meaning that output increases less than in proportion to all inputs | | 84 |
| 6786460564 | decreasing cost firm | a firm facing increasing returns to scale, meaning that out put increases more than in proportion to all inputs | | 85 |
| 6786464596 | increasing cost industry | experiences increases in average production costs as industry output increases, perhaps because input prices are bid upwards by increasing demand; result, a positively sloped long-run supply curve | | 86 |
| 6786472571 | constant cost industry | one that does not expereince increased production costs as output grows; result, horizontal long-run supply curve | | 87 |
| 6786478225 | decreasing cost industry | experiences decreasing average production costs as industry output increases, perhaps because mass production of inputs becomes feasible with increased input demand; result, negatively slopped long-run supply curve | | 88 |
| 6786484570 | productive efficiency | occurs when a firm produces at the lowest unit cost where MC=AC | | 89 |
| 6786488421 | economies of scope | exist when a firm's average production costs decrease because miltiple products are being produced; occurs when the production of two or more products (pork and pigskin) is complementary | | 90 |
| 6786497132 | perfect/pure competition | key characteristics: many sellers, standardized/homogenous product, firms are "price takers", free entry and exit | | 91 |
| 6786526466 | price taker | a company that must accept the prevailing prices in the market of its products, its own transactions being unable to affect the market price | | 92 |
| 6786529229 | economic profits | total revenues minus total costs, with opuurtunity costs included among the costs; the monetary costs and opportunity costs a firm pays and the revenue a firm receives | | 93 |
| 6786532683 | normal profits | an economic condition occurring when the difference between a firm's total revenue and total cost is equal to zero; the minimum level of profit needed for a company to remain competitive in the market | | 94 |
| 6786536450 | accounting profits | profits determined by subtracting from revenues only the explicit (monetary) cost of production, not such implicit costs as the oppurtunity costs; the monetary costs a firm pays out and the revenue a firm receives. It is the bookkeeping profit, and it is higher than economic profit | | 95 |
| 6786550471 | total revenue | the amount of money taken in from the sale of a good, calculated by multiplying price by the quantity of output sold (TR=PxQ) | | 96 |
| 6786556008 | marginal revenue | the addition to revenue gained when one more unit is sold | | 97 |
| 6786557141 | average revenue | the total revenue divided by quantity | | 98 |
| 6786558334 | profit | the difference between total revenue and total cost | | 99 |
| 6786564067 | shut down decision | for a firm in a perfectly competitive industry hinges on whether or not the price covers average variable cost | | 100 |
| 6786570886 | monopoly | the sole provider of a unique product; demand curve is the entire downward-sloping market demand curve | | 101 |
| 6786584517 | barriers | prevent entry of competitors allow successful monopoly firms to sustain economic profits even in the lone run; patents, control of resources, economies of scale and other cost advantages, exculsive licenses | | 102 |
| 6786600777 | price discrimination | the ability to charge different customers different prices that do not reflect differences in production costs; requirements 1) the firm must have market power(must face a downward sloping demand curve) 2) buyers with differing demand elasticities must be separable (case for consumers of different ages/locations) 3)the firm must be able to prevent the resale of its goods so that those paying the lower price cannot resell their goods to those who should pay the higher price | | 103 |
| 6786618843 | perfect price discrimination | a firm charges a different price for every unit consumed, the firm is able to charge the maximum possible price for each unit which enables the firm to capture all available consumer surplus for itself and avoiding the need to lower prices | | 104 |
| 6786627847 | oligopoly | an industry with a small number of firms selling a standarized or differentiated product; barriers to entry are high, and market power is substantial | | 105 |
| 6786630941 | market power | the ability of an individual firm to influence price | | 106 |
| 6786635175 | game theory | considers the strategic decisions of "players" (including, interdependent oligoplotic firms and consumers) in anticipation of their rivals' reactions | | 107 |
| 6786749199 | pay off matrix | a normal-form representation of a game in which players move simultaneously (or at least do not observe the other player's move before making their own) and receive the payoffs as specified for the combinations of actions played |  | 108 |
| 6786759635 | dominant strategy | A strategy is dominant if, regardless of what any other players do, the strategy earns a player a larger payoff than any other. ... Depending on whether "better" is defined with weak or strict inequalities, the strategy is termed strictly dominant or weakly dominant | | 109 |
| 6786764953 | dominant strategy equilibrium | the general assumption that when each player has a dominant strategy, thos strategies will be followed and the resulting collection of actions | | 110 |
| 6786774149 | Nash equilibrium | a term used in game theory to describe an equilibrium where each player's strategy is optimal given the strategies of all other players, exists when there is no unilateral profitable deviation from any of the players involved, occurs whenever two circles appear in the same square | | 111 |
| 6786790580 | prisoner's dilemma | a situation in which two players each have two options whose outcome depends crucially on the simultaneous choice made by the other, often formulated in terms of two prisoners separately deciding whether to confess to a crime | | 112 |
| 6786812607 | natural monopolies | a type of monopoly that exists as a result of the high fixed costs or startup costs of operating a business in a specific industry, can arise in industries that require unique raw materials, technology or other similar factors to operate | | 113 |
| 6786840718 | The Sherman Act | (1890) declared attempts to monopolize commerce or restrain trade among the states illegal | | 114 |
| 6786844009 | The Clayton Act | (1914) stregthened the Sherman Act by specifying that monopolisitc behavior such as price discrimination, tying contracts, and unlimited mergers are illegal | | 115 |
| 6786847949 | The Robinson-Patman Act | (1936) prohibits price discrimination except when it is based on differences in cost and marketability of a product, or good faith effort to meet competition | | 116 |
| 6786855325 | The Celler-Kefauver Act | (1950) authorized the government to ban vertical mergers and conglomerate mergers in addition to horizontal mergers | | 117 |
| 6786859233 | vertical mergers | mergers of firms at various steps in the production process from raw materials to finished products | | 118 |
| 6786865793 | conglomerate mergers | combinations of firms from unrelated industries | | 119 |
| 6786867247 | horizontal mergers | mergers of direct competitors | | 120 |
| 6786869204 | Herfindahl-Herschman Index | takes the market sare of each firm in an industry as a pergentage, squares each percentage, and adds them all up | | 121 |
| 6786872137 | concentration ratio | For the x-firm case, the ration is the sum of the market shares of the largest x firms in an industry, where x can represent any number | | 122 |
| 6786879867 | marginal revenue product of a worker | equal to the product of the marginal product of labor (MPL) and the marginal revenue (MR) of output, given by MR×MP: = MRPL. This can be used to determine the optimal number of workers to employ at an exogenously determined market wage rate. | | 123 |
| 6786924444 | monopsony | when one firm is the sole purchaser of labor services in a market; a market situation in which there is only one buyer | | 124 |
| 6786932075 | marginal factor cost (MFC) | the additional cost of hiring one more worker | | 125 |
| 6786922899 | unions | general methods used to increase the wages for their members: increase the demand for labor, decrease the supply for labor, negotiate higher wages | | 126 |
| 6786939590 | bilateral monopoly | then there is just one seller and one buyer inthe same market; a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer) | | 127 |
| 6786944439 | market failure | occurs when resources are not allocated optimally (allocative efficiency not achieved); can result from imperfect competition, externalities, public goods, imperfect information | | 128 |
| 6786948925 | imperfect information | buyers and/or sellers do not have full knowledge about available markets, prices, products, customers, suppliers, and so forth | | 129 |
| 6786953968 | externalities | costs or benefits felt beyond or "external to" those causing the effects | | 130 |
| 6786957506 | negative externality | a cost that is suffered by a third party as a result of an economic transaction | | 131 |
| 6786957507 | positive externality | a benefit that is enjoyed by a third-party as a result of an economic transaction | | 132 |
| 6786964988 | marginal private cost (MPC) | the change in the producer's total cost brought about by the production of an additional unit of a good or service | | 133 |
| 6786967447 | marginal external cost (MEC) | change in the total cost incurred by households or businesses, associated with a unit-change in the consumption or output of other households or businesses | | 134 |
| 6786974628 | public goods | those that many individuals beenfit from at the same time, nonrival in consumption and nonexcludeable | | 135 |
| 6786979382 | nonrival | one person's consumption of that good does not affect its consumption by others | | 136 |
| 6786981683 | nonexcludeable | goods that cannot be held back from those who desire access | | 137 |
| 6786985536 | free rider | one who attempts to benefit from a public good withour paying for it | | 138 |
| 6786990443 | Lorenz curve | a graph on which the cumulative percentage of total national income (or some other variable) is plotted against the cumulative percentage of the corresponding population (ranked in increasing size of share). The extent to which the curve sags below a straight diagonal line indicates the degree of inequality of distribution. IN SHORT it is a graph that represents the distribution/inequality in income or of wealth |  | 139 |
| 6786999598 | Gini coefficient | a statistical measure of the degree of variation or inequality represented in a set of values, used especially in analyzing income inequality | | 140 |
| 6787002929 | poverty line | the official benchmark of poverty | | 141 |
| 6787004204 | progressive tax | a tax in which the tax rate increases as the taxable amount increases (gov recieves a larger percentage of revenue from families with larger incomes) | | 142 |
| 6787011423 | regressive tax | a tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases (collects a larger percentage of revenue from families with smaller incomes) | | 143 |
| 6787018060 | proportional tax | (collects the same percentage of income from all families) a tax imposed so that the tax rate is fixed, with no change as the taxable base amount increases or decreases | | 144 |
| 6787037886 | social security | a program that provides cash benefits and health insurance (Medicare) to retired and disabled workers and their families | | 145 |
| 6787042640 | public assistance | aka welfare, typically provides temporary assistance to the very poor | | 146 |
| 6787045315 | supplemental security income (SSI) | assists very poor elderly individuals who have virtually no assets and little or no Social Security entitlement | | 147 |
| 6787049062 | unemployment compensation | provides temporary assistance to unemployed workers | | 148 |
| 6787050900 | medicaid | provides health and hospitalization benefits to the poor | | 149 |
| 6787055103 | food stamp and public housing | programs that provide food and shelter for the poor | | 150 |
| 6786401160 | long run | | | 151 |
| 6786401161 | short run | | | 152 |
