Econ 102 2013

A Social Science that examines how people chose among the alternatives available to them

The condition of having to choose among alternatives

A good for which the choice of one alternative requires that another be given up

A good for which the choice of one use does not require that another be given up

The value of the best alternative forgone in making any choice

The current level of an activity

A decision to do a little more or a little less of something

The branch of economics that focuses on the choices made by consumers and firms and impacts those choices have on individual markets

The branch of economics that focuses on the impact of choices on the total, or aggregate, level of economic activity

something whose value can change

Something whose value does not change

A systematic set of procedures through which knowledge is created

An assertion of a relationship between two or more variables that could be proven to be false

A hypothesis that has not been rejected after widespread testing and that wins general acceptance

A theory that has been subjected to even more testing and that has won virtually universal acceptance

A set of simplifying assumptions about some aspect of the real world

A Latin Phrase that means "all other things unchanged"

A variable that responds to change

A variable that induces a change

The incorrect assumption that one event causes another because the two events tend to occur together

A statement of fact or a hypothesis

A statement that makes a value judgment

A model that shows the goods and services that an economy is capable of producing- its opportunities  given the factors of production and the technology it has available

The set of rules that define how an economy's resources are to be owned and how decisions about their use are to be made

The resources available to the economy for the production of goods and services

The value, or satisfaction people derive from the goods and services they consume and the activities they pursue

The human effort that can be applied to the production of goods and services

A factor of production that has been produced for use in the production of other goods and services

The resources of nature that can be used for the production of goods and services

The skills a worker has as the result of education, training or experience that can be used in production

Includes money and other"paper" assets (such as stocks and bonds) that represent claims on future payments

The knowledge that can be applied to teh production of goods and services

A person who, operating within the context of a market economy, seeks to earn profit by finding new ways to organize factors of production

A graphical representation of the alternative combinations of goods and services an economy can produce

In producing a good or service, the situation that occurs if the opportunity cost of producing that good or service is lower for that economy than for any other

As an economy move along its PPC in the direction of producing more of a particular good, the opportunity cost of additional units of that good will increase

Situation in which all the factors of production that are available for use under current market conditions are being utilized

When an economy is operating on its PPC

Situation in which the economy is using the same quantities of factors of production but is operating inside its PPC

Situation in which an economy is producing the goods and services it has a comparative advantage in

The process through which an economy achieves an outward shift in its PPC

Economy in which resources are generally owned private individuals who have the power to make decisions about their use

Economy in which government is the primary owner of capital and natural resources and has broad power to allocate the use of factors of production

Economy that combines elements of market capitalist and command socialist economic systems

The institutions that bring together buyers and sellers

The quantity buyers are willing and able to buy of a good or service at a particular price during a particular period, all other things unchanged

A table that shows the quantities of a good or service demanded at different prices during a particular period, ceteris paribus

A graphical representation of a demand schedule

A movement along a demand curve that results from a change in price

For virtually all goods and services, a higher price leads to a reduction in quantity demanded and a lower price leads to an increase in quantity demanded

A shift in a demand curve

A variable that can change the quantity of a good or service demanded at each price

Two goods for which an increase in price of one reduces demand for the other

Two goods for which an increase in the price of one increases the demand for the other

A good for which demand increases when income increases

A good for which demand decreases a when income increases

The quantity sellers are willing to sell of a good or service at a particular price during a particular period, ceteris paribus

A table that shows quantities supplied at different prices during a particular period, ceteris paribus

A graphical representation of a supply schedule

Movement along the supply curve caused by a change in price

A shift in the supply curve

A variable that can change the quantity of a good or service supplied at each price

Model that uses demand and supply curves to explain determination of price and quantity in the market

The price at which quantity demanded equals quantity supplied

The quantity demanded and supplied at the equilibrium price

The amount by which the quantity supplied exceeds the quantity demanded at the current price

The amount by which the quantity demanded exceeds the quantity supplied at the current price

Model that provides a look at how markets work and how they are related to each other

Markets in which firms supply goods and services demanded by households

Markets in which households supply factors of production- labor, capital, and natural resources-demanded by firms

Profits kept by a company

Profits distributed to shareholders

A minimum allowable price set above the equilibrium price

A maximum allowable price

An agent other than the seller or the buyer who pays part of the price of a good or service

The ratio of the % change in a dependent variable to a % change in an independent variable

e of y,x= %^y/%^x

The % change in quantity demanded of a particular good or service divided by the % change in the price of that good or service, ceteris paribus

e of D= %^ in quantity demanded/ %^ in price

Measure of elasticity based on % changes relative to the average value of each variable between two points

e of D= ^Q/(Q) / ^P/(P)

A firms output multiplied by the price at which it sells that output

Situation in which the absolute value of the price elasticity of demand is greater than 1

An increase in price reduces total revenue

Situation in which the absolute value of the price elasticity of demand is equal to one

An increase in price no change in revenue

Situation in which the absolute value of the price elasticity of demand is less than 1

An increase in price increases total revenue

Situation in which the price elasticity of demand is 0

Situation in which the price elasticity of demand is infinite

The % change in quantity demanded at a specific price divided by % change in income taht produced the demand change, ceteris paribus

e of Y= %^ in quantity demanded/ %^ in income

the % change in the quantity demanded of one good or service at a specific price divided by the % change in the price of a related good or service

e of A,B= %^ in quantity demanded of A/ %^ in price of B

The ratio of the % change in quantity supplied of a good or service to the % change in its price, ceteris paribus

The difference between total revenue and total cost

The total benefit of an activity minus its opportunity costs

The amount by which an additional unit of an activity increases its total benefit

The amount by which an additional unit of activity increases its total cost

If the marginal benefit of an additional unit of an activity exceeds the marginal cost, the quantity if the activity should be increased, if not it should be decreased

A boundary that limits the range of choices that can be made

The loss in net benefits resulting from a failure to carry out an activity at the most efficient level

The allocation of resources when the net benefits of all economic activities are maximized

A set of rules that specify the ways in which an owner can use a resource

A property right that allows its owner to prevent others from using the resource

A property right that allows the owner of a resource to sell or lease it to someone else

A situation that requires a competitive market with well defined and transferable property rights

The amount by which the total benefits to consumers from consuming a good exceed their total expenditures of that good

The difference between the total revenue received by sellers and their total cost

The failure of private decisions in the marketplace to achieve an efficient allocation of scarce resources

A good for which the cost of exclusion is prohibitive and the marginal cost of an additional user is zero

A good for which exclusion is possible and for which the marginal cost of another user is positive

People or firms that consume a public good without paying for it

A cost imposed on others outside of any market exchange

An action take by a person or firm that creates benefits for others in the absence of any market agreement

Resources for which no property rights have been defined

The number of units of utility  that a consumer gains from consuming a given quantity of a good, service, or activity during a particular time period

The amount by which total utility rises with consumption of an additional unit of a good, service, or activity, ceteris paribus

The tendency of marginal utility to decline beyond some level of consumption during a period

A restriction that total spending cannot exceed the budget available

Utility is maximized when total outlays equal the budget available and when the ratios of marginal utilities to prices are equal for all goods and services

MU of A/P of A = MU of B/P of B = ...=MU of N/P of N

Graphically shows the combination of two goods a consumer can buy with a given budget

Graph that shows combinations of two goods that yield equal levels of utility

The maximum amount of one good a consumer would be willing to give up in order to obtain an additional unit of another

A planning period over which the managers of a firm must consider one or more of their factors of production as fixed in quantity

A factor of production whose quantity cannot be changed during a particular period

A factor of production whose quantity can be changed during a particular period

The planning period over which a firm can consider all factors of production as variable

The relationship between factors of production and the output of a firm

Graph that shows the quantities of output that can be obtained from different amounts of a variable factor of production, assuming other factors of production are fixed