Stuff From Lectures Quiz 1 Flashcards
Price Discrimination
Different customers paying different prices for the same thing.
Consumer Sovereignity
Free market exists to fulfill the wants of the consumer.
Marginal Benefit
amount of enjoyment you get out of each additional individual thing you consume.
Holding other things constant
Ceteris Paribus
Law of (eventually) diminishing marginal utitlity
Eventually, the more you consume of something the less happy each additional thing you consume makes you.
|Ep| = infinity
perfectly elastic good
|EP| = 0
completely inelastic
When is total revenue maximized?
Usually when elasticity is unitary.
Moral Hazard
if you are protected from the consequense of an action you are more likely to do it.
Consumer Incidence
How much a consumer picks up the tab for a tax/tariff… found by subtracting original price from new price
Producer Incidence
How much the producer looses based on a tax/tariff… found by subtracting money producer receives from money they originally received.
Rule of the Short Side
When there is disequilibrium, the amount consumed will be the smaller number (whether supply or demand)
Productivity
how efficiently you use inputs to create outputs
TFP
Total Factor Productivity. Output/ labor and capital
MPL
Marginal Product of labor: change in output/ change in input
