Chapter 1 Definitions
Microeconomics
What is the behavior of individual decision-making units in the economy?
A point on the PPC curve
What is maximum efficiency?
The relationship between price and quantity on a demand curve
What is a Negative correlation?
The relationship between price and quantity in a supply curve
Positive
Complementary Goods
What are two goods that tend to be used together?
Macroeconomics
What is the economy as a whole to obtain a broad or overall picture of the economy?
A point below the PPC curve
What is inefficiency/underutilization?
During the Christmas season, more toys are demanded and the curve shifts right. (find determinant)
Expectations
Many weapons factories were destroyed in a war and the supply falls. (find determinant)
Raw materials
Subsidy
What is a payment made to a firm by the government?
Equity
What is the idea of being fair or just? (NOT THE SAME AS EQUALITY)
A point above the PPC curve
What is unattainable?
The Wicked movie is being advertised in all theatres and social media.
Taste
A business receives a subsidy to continue making cakes
Taxes
Marginal Cost
What is the extra or additional cost of producing one more unit of output?
Scarcity
What is the idea that resources are insufficient to satisfy unlimited human needs and wants?
A firm suffers strikes of its workers.
Frontier Decline.
Amazon drops its's monthly price while Netflix stays the same.
Related goods (substitute)
The price of butter lowers, and bread becomes more purchased
Other Products
Equilibrium
What is a state of balance between different forces, such as there is no tendency to change?
Intervention
What is the government getting involved with working of markets?
A firm receives new machinery.
Frontier growth
The price of jelly rises, causing the demand for peanut butter drop.
related goods (substitute)
A new telescope is created and is able to clearly see Uranus
Tech
Welfare
What is the amount of consumer and producer surplus?