Rationality
The extra enjoyment from a slice of pizza
What is the marginal benefit of pizza?
Jack's marginal benefit for baseball caps.
What is Jack's demand for baseball caps?
Marginal cost, price, profit maximization.
What are the ingredients to generate supply?
The area between the price and demand.
What is consumers' surplus?
An effect of any action on innocent bystanders that does not go through the price mechanism.
What is an externality?
The condition for excessive TV watching.
What is the marginal benefit from TV watching is smaller than the marginal cost?
The quantity demanded of any good or service declining as a response to an increase in its price.
What is the law of demand.
The quantity supplied rises as the price of the good is increased.
What is the law of supply?
An increase in the price.
What is a consequence of an increase in demand and/or a decrease in supply.
When marginal social benefit exceeds marginal private benefit.
What is a positive externality?
When preferring Econ 211 to Chem 114 and Chem 114 to Phil 105, the benefit derived from Chem 114.
What is the opportunity cost of taking Econ 211?
The consequence of an increase in the quality of a product.
What is an increase in demand?
The consequence of technological progress.
What is an increase or rightward shift in supply?
A decrease in the price and increase in the quantity.
What is the consequence of an increase in supply.
A Pigouvian tax.
What is a policy remedy for negative externalities.
Teachers cheating on behalf of students and teachers providing caffeinated sugary drinks to students on day of tests.
What are unintended consequences of providing incentives to teachers?
The consequence of an increase in the price of a substitute.
What is an increase in demand
The marginal revenue for a competitive firm.
What is the price?
An increase in the total quantity, a decrease in the price, a decrease in output by each firm and a decline in profit.
What are consequences of free entry in a competitive market?
When the marginal external cost is $5 and the Pigouvian is $3.
What is over-production?
A useful mind construct
What is a theory?
A property of demand when the good has few if any substitutes.
What is inelastic demand?
The area between price and marginal cost.
What is profit?
Gentrification, key money, longer commutes.
What are consequences of rent control?
When more and more people move to Minot, North Dakota because of a newly flourishing arts scene and as a consequence, real estate prices in Minot rise.
What is a proper response of markets to signal a change in relative scarcity?