Chapter 7
This is the satisfaction one gets from "consuming" a good.
What is utility?
The brain evolved many low-energy mental short cuts because of these.
What are heuristics?
These are money payments businesses make when purchasing resources they do not own.
What are explicit costs?
Beyond a certain point adding more variable resources increases output by a diminishing amount because of this.
What is the law of diminishing returns?
He is a standard poodle.
Who is Gary?
This is the additional satisfaction gained from consuming an additional unit of product.
What is marginal utility?
You just saw a news report about a shark attack and you are too afraid to go to the beach because of this.
What is the availability heuristic?
Total Revenue - Explicit Costs = this
What is accounting profit?
Total Variable Cost divided by Quantity.
What is Average Total Cost.
It can be positive, negative or zero.
What is marginal utility?
The gain in satisfaction becomes smaller as more units of a product are consumer is because of this.
What is the law of diminishing marginal utility?
You walk through an area where there is a lot of trash on the ground. You throw your empty coffee cut on the ground because of this.
What are framing effects?
Accounting Profit - Implicit Costs = this
What is Economic Profit?
Change is Total Cost divided by Change in Quantity
What is Marginal Cost?
Waiting until one hour before the exam to start studying is caused by this.
Allocating income so that the marginal utility per dollar spent is the same for every good purchased.
What is the utility maximization rule?
This type of economist believes self interestj as well as moral and ethical factors impact economic transactions.
What is a behavioral economist?
This can only be changed in the Long Run.
What is plant size?
The lowest level of output at which a firm can minimize long run average costs.
What is Minimum Efficient scale?
Nobel prize winner in economics.
Who is Richard Thaler?
The reason the consumer tries to use their money income to get the most satisfaction.
What is rational behavior?
Becky starts writing a 15 page paper thirty minutes before it is du.
What is planning fallacy?
The extra output or added product associated with adding a unit of variable resource to the production process.
What is marginal product?
Labor and Managerial specialization, efficient capital lead to these.
What are Economies of Scale?
You feel this 2.5 times more than a gain.
What is loss/loss aversion?