Quiz #13 Vocab Flashcards
Holding all other factors or conditions constant so as to see the impact of changing only one variable
Ceteris Parabis
Theoretical good for which there isn’t upward sloping demand curve: as the price rises, so does the quantity demanded
Giffen good
As the price of a good decreases, consumers feel’ richer’ and can afford more of it
Income effect
As the price of a good decreases, a consumer may buy more of this good relative a more expensive substitute good
Substitution effect
The optimal point for society when any further improvement for one group must come at the expense of another group
Pareto efficiency
Public goods with private goods characteristics: they maybe price excludable or share distributive characteristics
Quasi-public goods
In the short run, a firm will suspend operations when the selling price does not cover average variable cost
Shut down criterion
The level of output where the firms marginal revenue equals marginal cost
Profit maximizing criterion
Market situations where the consumer is better served by a well regulated monopoly: competition would prevent the benefit of economics of sale
Natural monopolies
The quotation mark cost quotation mark of time spent waiting in lines or in other forms of congestion on trying to acquire a good or service; typically associated with shortages or bad customer service
Queuing cost
Term used for the price of capital or productive machinery
Rental rate
Concept that all businesses exist in order to make money or turn a profit
Profit motive
A process of reallocating wealth from higher earners to lower ones
Redistribution
The act of buyers and sellers engaging in trade of their own free will and each receiving some kind of game in the process
Voluntary exchange
