ECON FINAL Flashcards
what does “guns or butter” illustrate?
trade-offs
What are the factors of production?
land, labor, capital
explain the law of increasing cost.
if you try to produce a different item, the cost of producing that will increase.
what type of economy do Mayans in Guetmala have with market days and such?
traditonal economy
what are the two names for the type of economy that is not market economy?
centrally-planned or command economy
What is the term economists use to describe the self-regulating nature of the marketplace?
the invisible hand
The woman who buys and ugly house and fixes it up & now her neighbors have a better property value is an example of what?
positive externality
what are inferior goods
when your income increases, demand for these decreases.
examples: used cars, off-brand cereal
what are normal goods?
when your income increases, you demand more of these
whta is elasticity of demand
measure of how consumers react to a change in price
what is total revenue
the money a company gets for selling its goods. 100 slices of pizza at $2 each makes for $200 in total revenue
what is total cost
fixed cost plus variable cost
the cost of producing one more unit of a good
marginal cost
the additional income from selling one more unit of a good
marginal revenue
when quantity demanded and quantity supplied are equal
equilibrium
4 criterion for perfect competition?
- many buyers and sellers
- identical products
- buyers/sellers are well-informed
- enter and exit freely
commodity examples?
milk, notebook paper, petroleum
what is a market structure in which many companies sell products that are similar but not identical
monopolistic competition
example of monopolistic competition
blue jean market
