Unit 1 Vocab
Efficiency
The use of resources in such a way as to maximize the output of goods and services
Normal Goods
A good that consumers demand more of when their income increases
GDP
The dollar value of all final goods and services produced within a country’s borders in a given year.
Determinants of Supply
Sellers
Productivity
Input Prices
Taxes/subsidies
Expectations
A cost borne by a bystander.
Negative Externality
Scarcity
The principle that limited amounts of goods and services are available to meet unlimited wants
Inferior Goods
A good that consumers demand less of when their income increases
Business Cycle
A period of macroeconomic expansion, followed by a contraction
Sole proprietorship means that the control is in the hands of how many people?
One person
Will the market likely under-produce positive externalities or negative ones?
Positive Externalities
Trade-Off
The act of giving up one benefit in order to gain another, greater benefit
Elasticity
The degree to which a demand or supply is sensitive to changes in price or income.
Underemployment
Working at a job for which one is overqualified, or working part-time when full-time work is desired
Babysitting, the black market, and gambling can all be examples of the...
Underground Economy
What type of goods are non-excludable and rival?
Common Resources
Opportunity Cost
The most desirable alternative given up as a result of a decision
A situation in which consumers want more of a good or service than producers are willing to make available at a particular price
Inflation
A general increase in prices across an economy.
The percentage of income paid in taxes decreases as income increases
Regressive Tax
What type of goods are excludable and non-rival?
Club Goods
Total Utility
The total amount of satisfaction received from all the units consumed of a good
Monopoly
A market in which a single seller dominates
Tax
A required payment to the government
Tax on imported goods
Tariff
Free Rider Problem
Someone who enjoys the benefits of a good without contributing to its cost.