FSOT Master 12 Flashcards
Perfectly discriminating monopolist
A firm that charges each buyer exactly his or her reservation price.
Perfectly elastic demand
The demand for a good is perfectly elastic with respect to price if its price elasticity of demand is infinite.
Perfectly elastic supply
The supply of a good is perfectly elastic with respect to price if its price elasticity of supply is infinite.
Perfectly elastic supply curve
A supply curve whose elasticity with respect to price is infinite.
Perfectly inelastic demand
The demand for a good is perfectly inelastic with respect to price if its price elasticity of demand is zero.
Perfectly inelastic supply
The supply of a good is perfectly inelastic with respect to price if its price elasticity of supply is zero.
Perfectly inelastic supply curve
A supply curve whose elasticity with respect to price is zero.
Perhaps the most common political argument for government intervention into the free flow of trade is that
it is necessary for protecting jobs and industries from foreign competition.
Personal Consumption Expenditure (PCE) Deflator
A measure of prices of goods that consumers buy that allows yearly changes in the basket of goods that reflect actual consumer purchasing habits.
Personal Responsibility Act
The 1996 federal law that transferred responsibility for welfare programs from the federal level to the state level and placed a five-year lifetime limit on payment of afdc benefits to any given recipient.
Phillips Curve
Describes the general inverse relationship between unemployment and inflation.
Planned aggregate expenditure (PAE)
Total planned spending on final goods and services.
Policy reaction function
Describes how the action a policymaker takes depends on the state of the economy.
Political Union
the evolution of a complete political entity cf: U.S.A. vs
the European Union.
Pork barrel spending
A public expenditure that is larger than the total benefit it creates but that is favored by a legislator because his or her constituents benefit from the expenditure by more than their share of the resulting extra taxes.
PORTER’S DIAMOND OF NATIONAL ADVANTAGE?
Porter’s notion is that 6 sets of variables shape the environment in which firms compete:
- Factor endowments
- Demand conditions
- Related and supporting industries
- Firm’s structure, strategy, and rivalry
- Chance
- Government Actions
Portfolio allocation decision
The decision about the forms in which to hold one’s wealth.
Positional arms control agreement
An agreement in which contestants attempt to limit mutually offsetting investments in performance enhancement.
Positional arms race
A series of mutually offsetting investments in performance enhancement that is stimulated by a positional externality.
Positional externality
Occurs when an increase in one person’s performance reduces the expected reward of another’s in situations in which reward depends on relative performance.
Positive analysis
Addresses the economic consequences of a particular event or policy, not whether those consequences are desirable.
Positive economic principle
One that predicts how people will behave.
Positive externality
See External benefit.
positive sum game?
A situtation where all countries can benefit from trade.