Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Econ 110 > Vocab First Midterm > Flashcards

Vocab First Midterm Flashcards

1
Q

Opportunity Cost

A

The highest valued alternative that must be given up to engage in an activity
(it isn’t the time that something takes up, it is what could’ve been done otherwise with that time)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Centrally Planned Economy

A

An economy in which the government decides how economic resources are allocated

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Market Economy

A

An economy in which the decisions of households and firms interacting in the markets allocate economic resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Mixed Economy

A

An economy in which most economic decisions result from the interaction of buyers and sellers in markets but in which the government plays a significant role in allocation of resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Productive efficiency

A

A situation in which a good or service is produced at the lowest possible cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Allocative Efficiency

A

A state of the economy in which production is in accordance with consumer preferences; in particular, every good or service is produced up to the point where the last unit provides a marginal benefit to society equal to the marginal cost of producing it

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Voluntary exchange

A

Both buyer and seller are made better by a transaction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Equity

A

A fair distribution of economic benefits

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Positive Analysis

A

objective and based on facts / is economic theory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Normative Analysis

A

subjective and based on opinion

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Marginal Benefit

A

gain from one additional unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Marginal Cost

A

Cost of one additional unit

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Percentage change Formula

A

(Value in 2nd period - Value in 1st period) / (Value in first period) x 100

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Scarcity

A

Limited resources but Unlimited wants

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Trade

A

Act of buying and selling

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Absolute advantage

A

The ability of an individual, a firm, or a country to produce more of a good or service than other competitors, using the same amount of resources.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Comparative Advantage

A

The ability of an individual, a firm, or a country to produce a good or service at a lower opportunity cost than competitors.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

3 types of Factors of Production

A

1) Labor
2) Capital
3) Natural Resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

The law of demand

A

holding everything else constant, when the price of a product falls, the quantity demanded of the product will increase, and when the price rises, the quantity demanded will decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Substitution effect (explaining law of demand)

A

The change in the quantity demanded of a good that results from a change in price, making the food more or less expensive relative to other goods that are substitutes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

The Income Effect (explaining the law of demand)

A

The change in the quantity demanded of a good that results from the effect of a change in the good’s price on consumers’ purchasing power.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Normal good

A

A good for which the demand increases as income rises and decreases as income falls

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Inferior Good

A

a good for which the demand increases as income falls, and decreases as income rises

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Substitutes

A

a good or service that can be used for the same purpose (margarine or butter)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Complements

A

goods or services that are used together (toothbrush/toothpaste)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Quantity Demanded

A

The amount of a product that consumers are willing to purchase at a given price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Market Demand

A

Demand of all consumers of a good or service

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

5 Factors that change Demand

A

1) Income
2) Price of related goods (subs/complements)
3) Tastes
4) Populations and Demographics
5) Expected Future Prices

29
Q

5 Factors that change Supply

A

1) Price of Inputs
2) Technological Change
3) Prices of related goods in production (substitutes/complements)
4) Numbers of Firms in the Market
5) Expected future prices

30
Q

Price Ceiling

A

A legally determined maximum price that sellers may change

31
Q

Price Floor

A

A legally determined minimum price that sellers may receive

32
Q

Consumer Surplus

A

I the difference between the highest price a consumer is willing to pay for a good or service and the actual price the consumer pays.

33
Q

Marginal Benefit

A

The additional benefit to a consumer from consuming one more unit of a good or service

34
Q

Producer Surplus

A

The difference between the lowest price a firm would be willing to accept for a good or service and the price it actually receives

35
Q

Marginal Cost

A

The additional cost to a firm of producing one more unit of a good or service.

36
Q

Economic Surplus

A

The sum of consumer surplus and producer surplus

37
Q

Deadweight loss

A

The reduction in economic surplus resulting from a market not being in competitive equilibrium

38
Q

Economic Efficiency

A

A market outcome in which the marginal benefit to consumers of the last unit produced is equal to its marginal cost of production and in which the sum of consumers surplus and producer surplus is at a maximum.

39
Q

Black Market

A

A market in which buying and selling take place at prices that violate government and police regulations.

40
Q

Tariff

A

A tax imposed by a government on imports

41
Q

Imports

A

Goods and serviced bought domestically but produced in other countries

42
Q

Exports

A

Goods and services produced domestically but sold in other countries

43
Q

Autarky

A

A situation in which a country does not trade with other countries

44
Q

Terms of Trade

A

The ratio at which a country can trade its exports for imports from other countries.

45
Q

Free Trade

A

Trade between countries that is without government restriction

46
Q

Quota

A

A numerical limit a government imposes on the quantity of a good that can be imported into the country.

47
Q

Voluntary Export Restraint (VER)

A

An agreement negotiated between two countries that places a numerical limit on the quantity of a good that can be imported by one country from the other country

48
Q

Externalities

A

A benefit or cost that affects someone who is not directly involved in the production or consumption of a good or service

49
Q

Private cost

A

The cost born by the producer of a good or service

50
Q

Social cost

A

The total cost of producing a good or service, and it is equal to the private cost plus any external cost, such as the cost of polution

51
Q

Coase Theorem

A

The argument that if transaction costs are low, private bargaining will result in an efficient solution to the problem of externalities

52
Q

4 types of goods

A

1) private
2) public
3) quasi public goods
4) Common resource

53
Q

Elasticity

A

A measure of how much one economic variable responds to changed in another economic variable

54
Q

Price elasticity of demand

A

% change in quantity demanded/ % change in price

55
Q

Elastic demand

A

price elasticity is > 1

56
Q

Inelastic demand

A

Price elasticity <1

57
Q

Unit Elastic demand

A

Price elasticity = 1

58
Q

Midpoint formula

A

(Q2-Q1)/(Q1+Q2/2) / (P2-P1)/(P1+P2/2)

59
Q

Perfectly Inelastic Demand

A

Price elasticity of demand = 0

60
Q

Perfectly Elastic Demand

A

Price elasticity of demand = infinity

61
Q

Private Benefit

A

received by the consumer

62
Q

Social Benefit

A

Received by the producer and everyone else

63
Q

Rivalry

A

One person’s consumption of a good means nobody else can consume it

64
Q

Excludability

A

Anyone who does not pay for a good cannot consume it.

65
Q

Price Elasticity Demand formula

A

(Percentage change in quantity demanded)/(Percentage change in price)

66
Q

Cross Price Elasticity Demand formula

A

(Percentage change in Q demanded of one good)/(Percentage change on P of another good)

67
Q

Income Elasticity Demand

A

(Percentage change in Q demanded)/(Percentage change in income)

68
Q

Price elasticity of supply

A

(Percentage change in quantity supplied)/(Percentage change in price)

69
Q

Cross Price elasticity of supply

A

Percentage change in Q supplied of 1 good / percentage change in P of another good

Econ 110 (3 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions