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Economic________is a reality that underlies economic behavior.
Self Interest
The desires of resource suppliers and producers to further their_____________ will automatically further the public interest.
own self-interest
If there was initially a shortage in the market for a product, then buyers
will drive the price up.
Upon buying a car with airbags, Indy begins to drive recklessly. This is an example of the
moral hazard problem.
The value that consumers get (from consuming a product) over and above what they actually paid for the product is called
consumer surplus.
An increase in ____________shifts the consumer's budget line to the right.
money income
______________are sellers of final products.
Businesses
The refers ___________to the capacity of a competitive market to equalize quantity demanded and quantity supplied.
rationing function of prices
Where there is asymmetric information between buyers and sellers markets can produce
inefficient outcomes.
For economists, the word "utility" means
pleasure or satisfaction.
Free products may or may not be free to individuals receiving them but are
never free to society.
____________encourage cooperation by improving the chances of mutually agreeable transactions.
Property rights
If there is a surplus of a product, its price
is above the equilibrium level.
The marginal cost to society of reducing pollution rises with increases in pollution abatement because of the law of
diminishing returns.
At equilibrium in a market for a product, the total revenues received by sellers equal the
total amount spent by buyers on the product.
Slopes of lines are especially important in economics because they measure
marginal changes
The market system's answer to the fundamental question "How will the system accommodate change?" is essentially
"Through the guiding function of prices and the incentive function of profits."
The supply curve shows the relationship between
price and quantity supplied.
__________is measured as the combined loss of consumer surplus and producer surplus from over- or underproducing.
An efficiency loss (or deadweight loss)
The Bitcoin currency is issued by
no government of any country.
The economizing problem for individuals is a consequence of the fact that economic
wants are greater than economic means or incomes.
To a resource market __________bring land, labor, capital, and entrepreneurial ability.
individuals
When central planners in a command economy end up having a huge surplus of shoes and widespread shortages of bread in their economy, they have failed to attain
allocative efficiency.
What two conditions must hold for a competitive market to produce efficient outcomes?
Supply curves must reflect all costs of production, and demand curves must reflect consumers' full willingness to pay.
____________is an institution that brings together buyers and sellers.
A Market