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Economics 190 > Chapter 6-10 > Flashcards

Chapter 6-10 Flashcards

1
Q

Market Price

A

When a market price allocates a scarce resource, the people who get the resource are those who are willing and able to pay the market price

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2
Q

Command System

A

allocates resources by the order of someone in authority

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3
Q

Majority Rule

A

allocates resource in the way that a majority of voters choose

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4
Q

Contest

A

allocates resources to a winner

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5
Q

first come first serve

A

allocates resources to those who are first in line

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6
Q

sharing equally

A

everyone gets the same amount of it

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7
Q

lottery

A

allocate resources to those who pick the winning number, draw the lucky cars, or come up lucky on some other system

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8
Q

Personal Characteristics

A

people with the right characteristics get the resources

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9
Q

Force

A

military force, theft

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10
Q

allocative efficiency

A

achieved when the quantities of goods and services produced are those that people value most highly

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11
Q

Marginal benefit

A

the benefit that people receive from consuming one more unit of a good or service. determined by peoples preferences

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12
Q

Marginal cost

A

the opportunity cost of producing one more unit of a good or service

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13
Q

Deadweight loss

A

the decrease in total surplus that results from an inefficient underproduction or overproduction

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14
Q

Tax incidence

A

the division of the burden of a tax between the buyer and the seller

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15
Q

excess burden

A

the amount by which the burden of a tax exceeds the tax revenue recieved by the government- the deadweight loss from a tax

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16
Q

Price ceiling or price cap

A

a government regulation that places an upper limit on the price at which a particular good, service, or factor of production may be traded

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17
Q

Rent ceiling

A

a regulation that makes it illegal to charge more than a specified rent for housing

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18
Q

Black market

A

an illegal market that operates alongside a government related market

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19
Q

Price floor

A

a government regulation that places a lower limit on the price at which a particular good, service, or factor of production may be traded

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20
Q

Minimum wage law

A

government regulation that makes hiring labor services for less than a specified wage is illegal

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21
Q

Price support

A

a price floor in an agricultural market maintained by a government guarantee to buy any surplus output at that price

22
Q

subsidy

A

a payment by the government to a producer to cover part of the cost of production

23
Q

Tariff

A

a tax imposed on a good when it is imported

24
Q

import quota

A

a quantitative restriction on the import of a good that limits the maximum quantity of a good that may be imported in a given year

25
Q

dumping

A

when a foreign firm sells its exports at a lower price than its cost of production

26
Q

rent seeking

A

lobbying and other political activity that aims to capture the gains from trade

27
Q

Externality

A

a cost or a benefit that arises from production and that falls on someone other than the producer or a cost or benefit that arises from consumption and that falls on someone other than the consumer

28
Q

Negative externality

A

a production or consumption activity that creates an external cost

29
Q

Positive externality

A

a production or consumption activity that creates an external benefit

30
Q

Marginal private cost

A

the cost of producing an additional unity of g or s that is borne by the producer of that good or service

31
Q

Marginal external cost

A

the cost of producing an additional unit of a good or service that falls on people other than the producer

32
Q

Marginal social cost

A

the MC incurred by the entire society, MSC=marginal private cost+marginal external cost

33
Q

Marginal private benefit

A

the benefit from an additional unit of good or service that the consumer of that god or service recieves

34
Q

Marginal external benefit

A

the benefit from an additional good or service that the people other than the consumer of that good enjoy

35
Q

Marginal social benefit

A

MSB= marginal private benefit+ marginal external benefit

36
Q

Public provision

A

the production of a good or service by a public authority that receives most of its revenue from the government

37
Q

voucher

A

a token that the government provides to households, which they can use to buy specified goods or services

38
Q

explicit cost

A

a cost paid in money

39
Q

implicit cost

A

an opportunity cost incurred by a firm when it uses a factor of production for which it does not make a direct money payment

40
Q

Economic Depreciation

A

an opportunity cost of a firm using capital that it owns, measured as the change in the market value of captial over a given period

41
Q

Normal profit

A

the return to entrepreneurship. Normal profit is part of a firms opportunity cost because it is the cost of not running another firm

42
Q

economic profit

A

total revenue minus total cost

43
Q

short run

A

the time frame in which the quantities of some resources are fixed

44
Q

Long run

A

the time frame in which the quantities of all resources can be varied

45
Q

Total product

A

the total quantity of a good produced in a given period

46
Q

Total cost

A

cost of all factors of production

TC=TFC+TVC

47
Q

total fixed cost

A

cost of land, capital =, and entrepreneurship

48
Q

total variable cost

A

cost of labor

49
Q

marginal cost

A

the change in total cost that results from a one unit increase in output

50
Q

average fixed cost

A

total fixed cost per unit of output

Economics 190 (4 decks)

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