Micro 101
Terms for the cost of one additional unit of consumption vs. the total cost divided by the number of units consumed?
What are marginal and average costs?
Valuing benefits and costs that occur in the future in present terms
What is discounting?
A situation where a shared resource, such as a pasture or a fishery, is open to all individuals to use without restriction, leading to overexploitation and depletion
What is the tragedy of the commons?
The measure of how efficiently workers or employees use their time and skills to produce goods or services (Getting more output or results from the same amount of labor input.)
What is labour productivity?
The economic concept that captures the cost of the forgone value when you choose to spend money on a vacation over buying an iPhone
What is opportunity cost?
The cost to society from one additional unit of carbon emissions
What is the social cost of carbon?
Unintended side effects of an economic activity on parties who are not directly involved in the activity, such as pollution from a factory impacting the health of nearby residents?
What are externalities?
The phenomenon where ice cream sales and crime rates both increase during the summer months, but it is not clear whether one variable is causing the change in the other?
What is correlation vs. causation?
A commodity or service that is provided without profit to all members of a society
What is a public good?
A market-based policy for reducing emissions, based on a maximum limit for a group of emitters, and that allows for the exchange of emissions allowances
What is cap and trade?
A model that identifies how environmental factors affect home prices
What is a hedonic price model?
Let’s imagine a new renewable power plant opens, and jobs are created because of power plant workers and indirect employees spending their wages in the local economy. E.g., A new hairdresser.
What are induced jobs?
The idea that you shouldn't waste your time on a boring movie just because you are already halfway through
What is the sunk cost fallacy?
A determination of whether an intervention has an effect, when the intervention is compared to a "baseline"
What is additionality?
A type of tax, named after an economist, that is designed to correct a market failure by pricing activities that generate negative externalities, such as pollution, in order to incentivize businesses to reduce their harmful impact on the environment?
What are Pigouvian taxes?
A tool for accounting for the fact that $100 is more valuable to low-income people than high-income people?
What are equity weights?
The ratio of the percentage change in demand for a good to the percentage change in its price?
What is price elasticity of demand?
What is leakage?
An increase in consumption that results from increased efficiency, for instance, when people drive more because of higher fuel efficiency standards?
What is a rebound effect?
Broader economic impacts of a policy regulating a particular industry that permeates not only that industry but affects the whole economy changing consumption patterns, production in other industries, competitiveness, etc..?
What are general equilibrium effects?