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ECON 101 > Untitled Deck > Flashcards

Untitled Deck Flashcards

1
Q

absolute advantage

A

the ability to do a task using fewer inputs

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2
Q

absolute poverty

A

the measure of the adequacy of resources relative to an absolute standard of living

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3
Q

cap and trade

A

a quantity regulation implemented by allocating a fixed number of permits, which can then be traded

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4
Q

club good

A

a good that is excludable, but non-rival in consumption

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5
Q

coase thereom

A

if bargaining is costless and property rights are clearly established and enforced, then externality problems can be solved by private bargains

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6
Q

common resources

A

a good that is rival and also nonexcludable

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7
Q

comparative advantage

A

the ability to do a task at a lower oppurtunity cost

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8
Q

consumer surplus

A

the economic surplus you get from buying something (consumer = marginal surplus - price)

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9
Q

corrective subsidy

A

a subsidy designed to induce people to take account of the positive externailities they cause

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10
Q

corrective tax

A

a tax designed to induce people to take account of the negative externailities they cause

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11
Q

cost-benefit principle

A

costs and benefits are the incentives that shape decisions. you should evaluate the full set of costs and benefits of any choice, and only pursue those whose benefits are at least as large as their costs

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12
Q

deadweight loss

A

how far economic surplus falls below the efficient outcome (deadweight loss = economic surplus at the efficient quantity - actual economic surplus)

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13
Q

derived demand

A

the demand for an input derives from the demand for the stuff that input produces

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14
Q

diminishing marginal utility

A

each additional dollar yields a smaller boost to your utility (that is, less marginal utility) than the previous dollar)

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15
Q

distributional consequences

A

who gets what

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16
Q

domestic demand curve

A

shows the quantity of a good that all domestic consumers added together plan to buy, at each price

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17
Q

domestic supply curve

A

shows the quantity of a good that all domestic suppliers added together plan to sell, at each price

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18
Q

economic efficiency

A

an outcome is more economically efficient if it yields more economic surplus

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19
Q

economic surplus

A

the total benefit minus total costs flowing from a decision. it measures how much a decision has improved your well-being

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20
Q

effective marginal tax rate

A

the amount of each extra dollar you can earn that you lose to higher taxes and lower government benefits

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21
Q

efficient allocation

A

allocating goods to create the largest economic surplus, which requires that each good goes to the person who’ll get the highest marginal benefit from it

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22
Q

efficient outcome

A

the efficient outcome yields the largest possible economic surplus

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23
Q

efficient production

A

producing a given quantity of output at the lowest possible cost, which requires producing each good at the lowest marginal cost

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24
Q

efficient quantity

A

the quantity that produces the largest possible economic surplus

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25
equity
an outcome yields greater equity if it results in a fairer distribution of economic benefits
26
export
to sell goods or services to foreign buyers
27
external benefit
a benefit occuring to bystanders
28
external cost
a cost imposed on bystanders
29
externality
a side effect of an activity that affects bystanders whose interests aren't taken into account
30
free-rider problem
when someone can enjoy the benefits of a good without bearing the costs
31
gains from trade
the benefits that come from reallocating resources, goods, and services to better uses
32
globalization
the increasing economic, political, and cultural integration of different countries
33
government failure
when government policies lead to worse outcomes
34
import
to buy goods or services from foreign sellers
35
import quota
a limit on the quantity of a good that can be imported
36
income
the money you receive in a period of time, such as a year
37
income effect
measures how people's choices change when they have more income. a higher wage increases your income, leading you to choose more leisure and hence less work
38
income taxes
taxes collected on all income, regardless of its source
39
interdependence principle
your best choice depends on your other choices, the choices others make, developments in other markets, and expectations about the future. when any of these factors changes, your best choice might change.
40
intergenerational mobility
the extent to which the economic status of children is independent of the economic status of their parents
41
internal markets
markets within a company to buy and sell scarce resources
42
knowledge problem
when knowledge needed to make a good decision is not available to the decision maker
43
labour supply
the time you spend working in the market
44
marginal external benefit
the extra external benefit occuring to bystanders from one extra unit
45
marginal external cost
the extra cost imposed on bystanders from producing one extra unit
46
marginal principle
decisions about quantities are best made incrementally. you should break "how many" questions into a series of smaller, or marginal decisions, weighing marginal benefits and marginal costs
47
marginal private benefit
the extra benefit enjoyed by the buyer from one extra unit
48
marginal private cost
the extra cost paid by the seller from producing one extra unit
49
marginal product of labour
the extra production that occurs from hiring an extra worker
50
marginal revenue product
measures the marginal revenue from hiring an additional worker. the marginal revenue product is equal to the marginal product of labour multiplied by the price of that product
51
marginal social benefit
all marginal benefits, no matter who gets them = Marginal private benefit + marginal external benefit
52
marginal social costs
all marginal costs, no matter who pays them = marginal private cost + marginal external cost
53
marginal utility
the additional utility you get from one extra dollar
54
market failure
when the forces of supply and demand lead to an inefficient outcome
55
means-tested
eligibility is based on income and sometimes wealth
56
negative externailty
a side effect that harms bystanders
57
nonexcludable
when someone cannot be easily be excluded from using something
58
nonrival
a good for which one person's use doesn't subtract from another's
59
normative analysis
prescribes what should happen, which involves value judgements
60
opportunity cost
the true cost of something is the next best alternative you have to give up to get it
61
permanent income
your average lifetime income
62
positive analysis
descibes what is happening, explaining why, or predicting what will happen
63
positive externality
a side effect that benefits bystanders
64
poverty line
an income level, below which a family is defined to be in poverty
65
poverty rate
the percentage of people whose family income is below the poverty line
66
prediction markets
markets whose payoffs are linked to whether an uncertain event occurs
67
producer surplus
the economic surplus you get from selling something (producer surplus = price - marginal cost)
68
progressive tax
a tax where those with more income tend to pay a higher share of their income in taxes
69
public good
a nonrival good that is nonexcludable and hence subject to the free-rider problem
70
rational rule
if something is worth doing, keep doing it until your marginal benefits equal your marginal costs
71
rational rule for buyers
buy more of an item if the marginal benefit of one more is greater than (or equal to) the price
72
rational rule for employers
hire more workers if the marginal revenue product is greater than (or equal to) the wage
73
rational rule for markets
produce more of a good if its marginal benefit is greater than (or equal to) the marginal cost
74
rational rule for sellers
sell one more item if the marginal revenue is greater than (or equal to) marginal cost
75
rational rule for sellers in competitive markets
sell one more item if the price is greater than (or is equal to) the marginal cost
76
rational rule for society
produce more of an item if its marginal social benefit is greater than (or equal to) the marginal social cost
77
rational rule for workers
work one more hour as long as the wage is at least as large as the marginal benefit of another hour of leisure
78
regressive tax
a tax where those with less income tend to pay a higher share of their income on the tax
79
relative poverty
a measure that compares poverty relative to the material living standards of your contemporary society
80
rival good
a good for which your use of it comes at someone else's expense
81
social insurance
government provided insurance against bad outcomes such as unemployment, illness, disability, or outliving your savings
82
social safety net
the cash assistance, goods, and services provided by the government to better the lives of those at the bottom of the income distribution
83
socially optimal
the outcome that is most efficient for society as a whole, including the interests of buyers, sellers, and bystanders
84
specialization
focusing on specific tasks
85
substitution effect
measures how people respond to a change in relative prices. a higher wage increases the returns to work relative to leisure, leading you to work more
86
tariff
a tax on imported products
87
trade costs
the extra costs incurred as a result of buying or selling internationally, rather than domestically
88
tragedy of the commons
the tendency to overconsume a common resource
89
utilitarianism
the political philosophy that government should try to maximize total utility in society
90
utility
your level of well-being
91
voluntary exchange
buyers and sellers exchange money for goods only if they both want to
92
wealth
all the assets - including savings, cars, a home - that you currently have
93
world price
the price that a product sells for in the global market

ECON 101 (1 decks)

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