all definitions Flashcards
What is abnormal profit?
Refers to positive economic profit, arising when total revenue is greater than total economic costs (implicit plus explicit costs); is also known as ‘supernormal profit’.
What is absolute advantage?
Refers to the ability of a country to produce a good using fewer resources than another country.
What is absolute poverty?
The inability of an individual or a family to afford a basic standard of goods and services, defined in relation to a nationally or internationally determined ‘poverty line’.
What is actual output in the PPC model?
Occurs somewhere inside an economy’s production possibilities curve (PPC) due to the presence of unemployed resources and productive inefficiency.
What is actual output in the AD-AS model?
May be higher or lower than potential output based on the position of an economy’s long-run aggregate supply (LRAS) curve.
What are ad valorem taxes?
Taxes calculated as a fixed percentage of the price of the good or service; the amount of tax increases as the price increases.
What is aggregate demand?
The total quantity of goods and services that all buyers in an economy want to buy over a particular time period, at different possible price levels.
What is the aggregate demand curve?
The curve that shows the relationship between the total quantity of goods and services that all buyers in an economy want to buy over a particular time period, at different price levels.
What is aggregate supply?
The total quantity of goods and services produced in an economy over a particular time period, at different price levels.
What are average costs?
Costs per unit of output, calculated by dividing total cost by the number of units of output produced.
What are average fixed costs?
Fixed cost per unit of output, calculated by dividing fixed cost by the number of units of output produced.
What is average product?
The total quantity of output of a firm per unit of variable input, showing how much output each unit of the variable input produces on average.
What is average revenue?
Revenue per unit of output sold, calculated by dividing total revenue by the number of units of output produced.
What is average tax rate?
Tax paid divided by total income, expressed as a percentage.
What are average total costs?
Total cost per unit of output, calculated by dividing total costs by the number of units of output; also equal to the sum of average fixed costs and average variable costs.
