Econ Final Exam Chapters 1-6
Terms
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- the most desirable alternative given up as a result of a decision
- opportunity cost
- limited quantities of resourves to meet unlimited wants
- scarcity
- a graph that show alternative ways to use an economy's resources
- productions possibilites curve
- using fewer resources than an economy is capable of using
- underutilization
- actions or activities that one person performs for another
- services
- physical objects such as clothes or shoes
- goods
- the effort that people devote to a task for which they are paid
- labor
- using resources in such a way as to maximize the production of goods and services
- efficiency
- the three goods and services that are used to make goods and services
- factors of production
- a situation in which a good or service is unavailable
- shortage
- the line on a production possibilities graph that shows the maximum possible output
- production possibilities frontier
- limited quantities of resources to meet unlimited wants
- scarcity
- the total value of all final goods and services produced in a particular economy
- gross domestic product (GDP)
- the concerns of the public as a whole
- public interest
- requires companies to provide full information about their products
- public disclosure laws
- someone who would not choose to pay for a certain good or service but would get the benefits if it were provided as a public good
- free rider
- goods and services produced for free or at greatly reduced prices
- in-kind benefits
- the part of the economy that involves the transactions of individuals and businesses
- private sector
- an income level below which income is insufficient to support families or households
- poverty threshold
- the study of the behavior and decision making of entire economics
- macroeconomics
- a graphic representation of a demand schedule
- demand curve
- goods that are used in place of one another
- substitutes
- consumers buy more of a good when its price decreases and less when its price increases
- law of demand
- a measure of how consumers react to a change in price
- elasticity of demand
- when consumers react to an increase in a good's price by consuming less of that good and more of other goods
- substitution effect
- the total amount of money a firm receives by selling goods or services
- total revenue
- two goods that are bought and used together
- compliments
- a good that consumers demand more of when their income increases
- normal good
- a graph of the quantity supplied of a good by all suppliers
- market supply curve
- the amount a supplier is willing and able to supply at a certain price
- quantity supplied
- fixed costs plus variable costs
- total cost
- a factor that can change
- variable
- government intervention in a market that affects the production of a good
- regulation
- a level of production in which the marginal product of labor increases as the number of workers increase
- increasing marginal return
- the additional income from selling one more unit of a good; sometimes equal to price
- marginal revenue
- a chart that lists how much of a good a supplier will offer at different prices
- supply schedule
- the change in output from hiring one additional unit of labor
- marginal product of labor
- when quantity supplied is not equal to quantity demanded in a market
- disequilibrium
- the financial and opportunity costs consumers pay when searching for a good or service
- search costs
- a price ceiling placed on rent
- rent control
- a situation in which the quantity demanded is greater than the quantity supplied, also known as excess demand
- shortage
- a situation in which quantity supplied is greater than quantity demanded, also known as excess supply
- surplus
- any factor that makes it difficult for a new firm to enter a market
- barrier to entry
- making a product different from other similar products
- differentiation
- the right to sell a good or service within an exclusive market
- franchise
- an illegal grouping of companies that discourages competition
- trust
- factors that cause a producer's average cost per unit to fall as output rises
- economies of scale
- a series of competitive price cuts that lowers the market price below the cost of production
- price war
- a market structure in which a large number of firms all produce the same product
- perfect competition
- a market structure in which a few large firms dominate a market
- oligopoly