Econ 102 2013

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ametzga
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212283
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Econ 102 2013
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2013-04-09 21:46:01
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Econ
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Whole semester of Econ 102
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  1. Economics
    A Social Science that examines how people chose among the alternatives available to them
  2. Scarcity
    The condition of having to choose among alternatives
  3. Scarce Good
    A good for which the choice of one alternative requires that another be given up
  4. Free good
    A good for which the choice of one use does not require that another be given up
  5. Opportunity Cost
    The value of the best alternative forgone in making any choice
  6. Margin
    The current level of an activity
  7. Choice at the margin
    A decision to do a little more or a little less of something
  8. Microeconomics
    The branch of economics that focuses on the choices made by consumers and firms and impacts those choices have on individual markets
  9. Macroeconomics
    The branch of economics that focuses on the impact of choices on the total, or aggregate, level of economic activity
  10. Variable
    something whose value can change
  11. Constant
    Something whose value does not change
  12. Scientific method
    A systematic set of procedures through which knowledge is created
  13. Hypothesis
    An assertion of a relationship between two or more variables that could be proven to be false
  14. Theory
    A hypothesis that has not been rejected after widespread testing and that wins general acceptance
  15. Law
    A theory that has been subjected to even more testing and that has won virtually universal acceptance
  16. Model
    A set of simplifying assumptions about some aspect of the real world
  17. Ceteris Paribus
    A Latin Phrase that means "all other things unchanged"
  18. Dependent variable
    A variable that responds to change
  19. Independent variable
    A variable that induces a change
  20. Fallacy of false cause
    The incorrect assumption that one event causes another because the two events tend to occur together
  21. Positive statment
    A statement of fact or a hypothesis
  22. Normative statement
    A statement that makes a value judgment
  23. Production Possibilities model
    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
  24. Economic system
    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
  25. Factors of production
    The resources available to the economy for the production of goods and services
  26. Utility
    The value, or satisfaction people derive from the goods and services they consume and the activities they pursue
  27. Labor
    The human effort that can be applied to the production of goods and services
  28. Capital
    A factor of production that has been produced for use in the production of other goods and services
  29. Natural resources
    The resources of nature that can be used for the production of goods and services
  30. Human capital
    The skills a worker has as the result of education, training or experience that can be used in production
  31. Financial capital
    Includes money and other"paper" assets (such as stocks and bonds) that represent claims on future payments
  32. Technology
    The knowledge that can be applied to teh production of goods and services
  33. Entrepeneur
    A person who, operating within the context of a market economy, seeks to earn profit by finding new ways to organize factors of production
  34. Production possibilities curve (PPC)
    A graphical representation of the alternative combinations of goods and services an economy can produce
  35. Comparative advantage
    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
  36. Law of increasing opportunity cost
    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
  37. Full employment
    Situation in which all the factors of production that are available for use under current market conditions are being utilized
  38. Efficient Production
    When an economy is operating on its PPC
  39. Inefficient production
    Situation in which the economy is using the same quantities of factors of production but is operating inside its PPC
  40. Specialization
    Situation in which an economy is producing the goods and services it has a comparative advantage in
  41. Economic growth
    The process through which an economy achieves an outward shift in its PPC
  42. Market capitalist economy
    Economy in which resources are generally owned private individuals who have the power to make decisions about their use
  43. Command Socialist economy
    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
  44. Mixed economies
    Economy that combines elements of market capitalist and command socialist economic systems
  45. Markets
    The institutions that bring together buyers and sellers
  46. Quantity demanded
    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
  47. Demand schedule
    A table that shows the quantities of a good or service demanded at different prices during a particular period, ceteris paribus
  48. Demand curve
    A graphical representation of a demand schedule
  49. Change in quantity demanded
    A movement along a demand curve that results from a change in price
  50. Law of demand
    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
  51. Change in demand
    A shift in a demand curve
  52. Demand shifter
    A variable that can change the quantity of a good or service demanded at each price
  53. Complements
    Two goods for which an increase in price of one reduces demand for the other
  54. Substitutes
    Two goods for which an increase in the price of one increases the demand for the other
  55. Normal good
    A good for which demand increases when income increases
  56. Inferior good
    A good for which demand decreases a when income increases
  57. Quantity supplied
    The quantity sellers are willing to sell of a good or service at a particular price during a particular period, ceteris paribus
  58. Supply schedule
    A table that shows quantities supplied at different prices during a particular period, ceteris paribus
  59. Supply curve
    A graphical representation of a supply schedule
  60. Change in quantity supplied
    Movement along the supply curve caused by a change in price
  61. Change in supply
    A shift in the supply curve
  62. Supply shifter
    A variable that can change the quantity of a good or service supplied at each price
  63. Model of demand and supply
    Model that uses demand and supply curves to explain determination of price and quantity in the market
  64. Equilibrium price
    The price at which quantity demanded equals quantity supplied
  65. Equilibrium quantity
    The quantity demanded and supplied at the equilibrium price
  66. Surplus
    The amount by which the quantity supplied exceeds the quantity demanded at the current price
  67. Shortage
    The amount by which the quantity demanded exceeds the quantity supplied at the current price
  68. Circular flow model
    Model that provides a look at how markets work and how they are related to each other
  69. Product markets
    Markets in which firms supply goods and services demanded by households
  70. Factor markets
    Markets in which households supply factors of production- labor, capital, and natural resources-demanded by firms
  71. Retained earnings
    Profits kept by a company
  72. Dividends
    Profits distributed to shareholders
  73. Price floor
    A minimum allowable price set above the equilibrium price
  74. Price ceiling
    A maximum allowable price
  75. Third party payer
    An agent other than the seller or the buyer who pays part of the price of a good or service
  76. Elasticity
    The ratio of the % change in a dependent variable to a % change in an independent variable

    e of y,x= %^y/%^x
  77. Price elasticity of demand
    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
  78. Arc elasticity
    Measure of elasticity based on % changes relative to the average value of each variable between two points

    e of D= ^Q/(Q) / ^P/(P)
  79. Total revenue
    A firms output multiplied by the price at which it sells that output
  80. Price elastic
    Situation in which the absolute value of the price elasticity of demand is greater than 1

    An increase in price reduces total revenue
  81. Unit price elastic
    Situation in which the absolute value of the price elasticity of demand is equal to one

    An increase in price no change in revenue
  82. Price inelastic
    Situation in which the absolute value of the price elasticity of demand is less than 1

    An increase in price increases total revenue
  83. Perfectly inelastic
    Situation in which the price elasticity of demand is 0
  84. Perfectly elastic
    Situation in which the price elasticity of demand is infinite
  85. Income elasticity of demand
    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
  86. Cross price elasticity of demand
    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
  87. Price elasticity of supply
    The ratio of the % change in quantity supplied of a good or service to the % change in its price, ceteris paribus
  88. *Economic profit
    The difference between total revenue and total cost
  89. *Net benefit
    The total benefit of an activity minus its opportunity costs
  90. *Marginal benefit
    The amount by which an additional unit of an activity increases its total benefit
  91. *Marginal cost
    The amount by which an additional unit of activity increases its total cost
  92. *Marginal benefit rule
    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
  93. *Constraint
    A boundary that limits the range of choices that can be made
  94. *Deadweight loss
    The loss in net benefits resulting from a failure to carry out an activity at the most efficient level
  95. *Efficient
    The allocation of resources when the net benefits of all economic activities are maximized
  96. *Property rights
    A set of rules that specify the ways in which an owner can use a resource
  97. *Exclusive property rights
    A property right that allows its owner to prevent others from using the resource
  98. *Transferable property right
    A property right that allows the owner of a resource to sell or lease it to someone else
  99. * Efficiency condition
    A situation that requires a competitive market with well defined and transferable property rights
  100. *Consumer surplus
    The amount by which the total benefits to consumers from consuming a good exceed their total expenditures of that good
  101. *Producer surplus
    The difference between the total revenue received by sellers and their total cost
  102. *Market failure
    The failure of private decisions in the marketplace to achieve an efficient allocation of scarce resources
  103. *Public good
    A good for which the cost of exclusion is prohibitive and the marginal cost of an additional user is zero
  104. *Private good
    A good for which exclusion is possible and for which the marginal cost of another user is positive
  105. *Free riders
    People or firms that consume a public good without paying for it
  106. *External cost
    A cost imposed on others outside of any market exchange
  107. *External benefit
    An action take by a person or firm that creates benefits for others in the absence of any market agreement
  108. *Common property resource
    Resources for which no property rights have been defined
  109. *Total utility
    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
  110. *Marginal Utility
    The amount by which total utility rises with consumption of an additional unit of a good, service, or activity, ceteris paribus
  111. *Law of diminishing marginal utility
    The tendency of marginal utility to decline beyond some level of consumption during a period
  112. *Budget constraint
    A restriction that total spending cannot exceed the budget available
  113. *Utility maximizing condition
    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
  114. *Budget Line
    Graphically shows the combination of two goods a consumer can buy with a given budget
  115. *Indifference curve
    Graph that shows combinations of two goods that yield equal levels of utility
  116. *Marginal rate of substitution
    The maximum amount of one good a consumer would be willing to give up in order to obtain an additional unit of another
  117. *Short run
    A planning period over which the managers of a firm must consider one or more of their factors of production as fixed in quantity
  118. *Fixed factor of production
    A factor of production whose quantity cannot be changed during a particular period
  119. *Variable factor of production
    A factor of production whose quantity can be changed during a particular period
  120. *Long run
    The planning period over which a firm can consider all factors of production as variable
  121. *Production function
    The relationship between factors of production and the output of a firm
  122. *Total product curve
    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

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