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30 Cards in this Set
- Front
- Back
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good |
anything from which individuals recieve utility |
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bad |
anything from which an individual receives disutility |
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utility |
satisfaction received from a good |
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disutility |
dissatisfaction received from a good |
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ceteris paribus |
all other things equal (constant) |
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positive |
study of "what is" |
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normative |
study of what should be |
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- the need to make choices - the need for a rationing device - competition |
scarcity's effect |
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rationing device |
decides who gets what |
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product possibilities frontier |
possible combos of 2 goods that can be produced in a certain amount of time |
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law of opportunity cost |
more goods produced means opportunity cost of that good increases |
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comparative advantage |
when someone can produce at a lower opportunity cost than someone else |
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specialization |
producing goods in which you have a comparative advantage |
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anything inside or outside is inefficient |
what points on a ppf are inefficient? |
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inversely |
in law of demand, price and quantity are ________ related |
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law of diminishing marginal utility |
utility of a good will decline as the amount increases |
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normal good |
a good the demand for which rises as income rises |
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inferior good |
a good the demand for which falls as income rises |
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neutral good |
a good the demand for which does not change as income rises or falls |
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substitutes |
two good that satisfy the same needs or desires |
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complements |
two goods used jointly in consumption |
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directly |
in law of supply, price and quantity are _______ related |
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consumer surplus |
max. buying price - price paid |
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producer surplus |
price received - minimum selling price |
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price ceiling |
government mandated maximum price above which legal trades can't be made |
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below |
the price ceiling is located _______ equilibrium |
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price floor |
government mandated minimum price below which legal trades can't be made |
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above |
price floor is located __________ equilibrium |
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absolute price |
price of a good in money terms |
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relative price |
price of a good in terms of another good |
