The Trade War
The value of the next best alternative given up.
Opportunity Cost
This law states that as price rises, the quantity demanded falls.
Law of Demand
A measure of how much quantity demanded responds to a change in price.
Price Elasticity of Demand
These costs do not change regardless of how much is produced.
Fixed Costs
The specific point where any firm maximizes its total profit.
MR=MC
A point inside the Production Possibilities Curve indicates this.
Inefficiency (or Unemployment)
This type of good sees a decrease in demand when consumer income rises.
Inferior Good
If a price floor is set below the equilibrium price, it is called this.
Non-binding
The additional cost of producing one more unit of output.
Marginal Cost
In the long run, firms in this market earn this type of profit.
Zero (or Normal Profit)
The ability to produce a good at a lower opportunity cost than others.
Comparative Advantage
A simultaneous increase in supply and decrease in demand makes price do this.
Decrease
The formula for this is: (Change in Q) / (Change in Income).
Income Elasticity
The mathematical relationship where MC crosses ATC and AVC.
Intersection at Minimums
This type of efficiency occurs when P = Minimum ATC.
Productive Efficiency
This economic statement is based on facts and can be tested or proven.
Positive Economics
An increase in the price of a substitute good causes this shift.
Demand Shifts Right
If the Cross-Price Elasticity of two goods is negative, the goods are this.
Complements
This "Law" explains the upward slope of the marginal cost curve.
Diminishing Marginal Returns
A firm should stay open in the short run as long as Price is above this.
AVC
In a trade between two nations, the trade must fall between these.
Terms of the trade (opportunity cost)
The area above the price and below the demand curve.
Consumer Surplus
When a tax is placed on a good, this group pays more of it if demand is inelastic.
Consumers
Total Revenue minus both explicit and implicit costs.
Economic Profit
The horizontal demand curve for a perfectly competitive firm is also these three things.
MR, AR, and D (Mr. DARP)