Micro eco

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Author:
zzto
ID:
261165
Filename:
Micro eco
Updated:
2014-02-10 00:05:05
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micro eco ecu
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Microeconomics flash cards
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  1. Marginal analysis-
    Analysis that involves comparing marginal benefits and marginal costs
  2.     Allocative efficiency
    A state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it.
  3. Productive efficiency
    A situation in which a good or service is produced at the lowest possible cost.
  4.     Microeconomics-
    The study of how households and firms make choices, how they interact in markets, and how the government attempts to influence their choices.
  5.     Macroeconomics-
    The study of the economy as a whole, including topics such as inflation, unemployment, and economic growth.
  6.     Equity-
    The fair distribution of economic benefits
  7. Normative vs postive
    normative=what should be, positive= what is
  8. Production possibilities frontier-
    A curve showing the maximum attainable combinations of two products that may be produced with available resources and current technology.
  9. Comparative advantage-
    The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.
  10. Absolute advantage-
    The ability of an individual, a firm, or a country to produce more of a good or service than competitors, using the same amount of resources.
  11. Demand curve-
    A curve that shows the relationship between the price of a product and the quantity of the product demanded.
  12. Law of demand-
    The rule that, holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price of a product rises, the quantity demanded of the product will decrease
  13. Income effect-
    The change in the quantity demanded of a good that results from the effect of a change in the good’s price on consumers’ purchasing power.
  14. Ceteris paribus- (“all else equal”) condition
    The requirement that when analyzing the relationship between two variables—such as price and quantity demanded—other variables must be held constant.
  15. Supply schedule-
    A table that shows the relationship between the price of a product and the quantity of the product supplied.

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