GENERAL DEFINITIONS
The inability to satisfy all wants at once.
What is scarcity?
He proposed the labor theory of value.
Who is Adam Smith?
The G in IRENTG.
What is government action?
The unrecoverable cost that was incurred in the past and reflects no current opportunity for choice.
What is sunk cost?
Suppliers not having enough goods to satisfy demand.
A combination of characteristics from market and command economies.
What is a mixed economy?
He proposed a subjective theory of value.
Who is Carl Menger?
The E in TRIBE.
Different quantities of a good that sellers are willing and able to sell at different prices.
What is supply?
A legally mandated minimum price.
The value of a foregone alternative.
What is opportunity cost?
Author of "That Which is Seen, and That Which is Unseen"
Who is Frederic Bastiat?
If most people decided that burgers were gross, this shifter would cause a decrease in demand for them.
What are tastes and preferences?
The price at which goods actually sell on a market.
What is the market clearing price or equilibrium price?
A legally mandated maximum price.
What is a price ceiling?
The ability of an economic actor to produce at a lower opportunity cost compared to a competitor.
What is comparative advantage?
He said: "for someone who owns something and intends not to use or consume it himself but to exchange it for other commodities, its value is equal to the amount of labour it enables him to purchase or command.
Who is Adam Smith?
This shifter would cause an increase in demand for bus tickets as the population of a city increases.
What is number of buyers?
The additional cost that will be expected to be incurred if an action is undertaken.
What is marginal cost?
The typical consequence caused by a price floor above the market clearing price.
What is a surplus?
The total satisfaction or benefit a person derives from a good or service.
What is utility?
He said: "Needs arise from our drives and the drives are imbedded in our nature. An imperfect satisfaction of needs leads to the stunting of our nature. Failure to satisfy them brings about our destruction."
Who is Carl Menger?
This shifter would cause an increase in supply for gaming consoles and TVs as Black Friday approaches.
What are expectations of future profit?
A measure of how much quantity demanded responds to a change in price.
What is price elasticity of demand?
What is an ineffective or non-binding price floor?