Foundations of Economics
The problem of unlimited desired and limited resources
What is scarcity?
Hurrican Florence was an example of one of these
What is a negative supply shock?
The term used for when PED is less than one
What is price inelastic?
A maximum legal price that producers may charge
What are price ceilings?
Lighthouses are an example of this kind of good
What is a public good?
When an economy is producing inside this, it is not operating as efficiently as possible
What is a production possibilities curve?
Graham crackers and marshmallows are examples of these kinds of goods
What are complements?
Wrangler jeans would be this kind of good whereas Gucci jeans would be this kind of good
Sickness from second-hand smoke is an example of these
What are negative externalities of consumption?
Latin expression meaning "other things equal"
What is the ceteris paribus assumption?
When income increases, demand for this kind of good decreases
What is an inferior good?
Two of the determinants of price elasticity of supply
What are length of time to respond to price changes, mobility of factors of production, spare capacity of firms, and the ability to store stocks?
When this kind of tax is imposed, the resulting supply curve has a steeper slope than the original supply curve
The two characteristics of public goods
What are non-rivalrous and non-excludable?
The value of the next best alternative that must be sacrificed to obtain something else
What is opportunity cost?
Prices serve as these two things
What are signals and incentives?
A firm's total revenue increases when they lower their price if price elasticity of demand is in this range of values
What is greater than one?
These are usually set in markets for agricultural goods
What are price floors?
The Kyoto Protocol is an example of this kind of market-based policy
What are cap-and-trade schemes?
The four factors of production
What are land, labor, capital, and entrepreneurship?
When no one can become better off without someone else becoming worse off
What is allocative efficiency?
This kind of elasticity can be used to explain the changing relative composition of sectors in an economy
What is income elasticity of demand?
A tax imposed in such a manner that the tax rate decreases as the amount subject to taxation increases.
What is regressive tax?
The Tragedy of the Commons refers to problems arising from what kind of resource?