Scarcity
The basic economic problem that exists because resources are limited but wants are unlimited.
What is scarcity?
An increase in consumer income causing greater demand for restaurant meals would shift this curve.
What is the demand curve?
A business raises prices and discovers total revenue also rises. This suggests demand is in this range.
What is inelastic?
Factory emissions affecting nearby residents are an example of this market failure.
What is a negative externality?
A good that remains available to everyone regardless of payment is described as this.
What is nonexcludable?
The value of the next best alternative given up when making a choice.
What is opportunity cost?
A technological improvement that lowers production costs would cause this market change.
What is an increase in supply?
Goods that are typically purchased together are often called
Compliments
The benefit society receives from widespread vaccinations is classified as this.
What is a positive externality?
A good whose consumption by one person does not diminish another person's consumption is described as this.
What is nonrival?
These exist because society has limited productive resources and cannot have everything it wants.
What are trade-offs?
When quantity demanded exceeds quantity supplied at the current price, economists call this condition a __________.
What is a shortage?
If consumers continue buying nearly the same amount despite large price changes, demand is described as this.
What is inelastic?
The difference between private and social costs is central to understanding this economic problem.
What is market failure?
National defense is frequently cited as the textbook example of this category of goods.
What is a public good?
This principle states that adding more of a variable input eventually leads to smaller increases in output.
What are diminishing marginal returns?
A movement from one point to another on the same demand curve is caused by a change in this variable.
What is the good's own price?
A monopolist considering a price cut should first determine the responsiveness of consumers, known as this concept.
What is elasticity of demand?
Economists often recommend this policy tool to force polluters to account for external costs.
What is a Pigouvian tax?
The tendency for individuals to benefit from a good without contributing toward its cost is called this.
What is the free-rider problem?
A student spends Saturday studying for an economics exam instead of working an 8-hour shift. Economists would identify this as the student's __________.
What is opportunity cost?
If supply increases while demand decreases, the effect on equilibrium quantity is uncertain, but the effect on this variable is not.
What is price?
The tax burden falls entirely on buyers when demand has this characteristic.
What is perfect inelasticity?
Negative externalities result in a market quantity that is typically this relative to the efficient level.
What is too high?
Markets often fail to provide enough public goods because producers cannot easily do this.
What is charge users?