Surprise
This effect dominates for elastic situations
What is the quantity effect?
The author of Wealth of Nations and the generally referred to as "the father of economics" was this man
Who is Adam Smith?
This externality gives an additional cost to society
What is a negative externality?
Any decision that requires the use of resources that could be used in another way involves
What are opportunity costs?
Change in costs resulting from producing an additional unit or amount of output
What are marginal costs?
The amount a consumer is willing to pay minus what they actually pay
What is consumer surplus?
Rise in income decreases demand for this good
What is an inferior good?
Sales tax is an example of this kind of tax
What is regressive tax?
Another word for excess of Demand
What is a shortage?
An increase in output, long-run ATC decreases
What are economies of scale?
In a competitive labor market, MRP is equal to this
What is wage?
This law states price and quantity supplied are positively related
What is the law of supply?
This type of externality gives an additional benefit to society
What is a positive externality?
This total is calculated using the equation: Price x Quantity
What is total revenue?
Increase in output, long-run ATC stays the same
What are constant returns to scale?
Graphically illustrates the degree of income inequality in a country
What is the Lorenz Curve?
Measures the value of what the next unit of a resource brings to a firm
What is Marginal Revenue Product?
What is proportional tax?
Another word for excess of supply
What is a surplus?
Increase in output, long-run ATC increases
What are diseconomies of scale?
Without collusion, firms are advised to follow this equilibrium
What is Nash Equilbrium?
This is the minimum price buyers are required to pay
What is a price floor?
US income tax is an example of this kind of tax
What is progressive tax?
A firm that cannot influence the price of the good or service that it produces
What is a price taker?
An increase in income means an increase in demand for this good
What is a normal good?