Econ

The true cost of something is the next best alternative you must give up to get it

Occurs because of limited resources

a cost that has been incurred and cannot be reversed

the extra benefit from one unit

the extra cost from one unit

If something is worth doing, keep doing it until your marginal benefits equals your marginal costs

any place where traders, producers and consumers, come together for exchange

economic model/framework used to assist our analysis of particular markets

one where there are many buyers and sellers of the same good or service

the conditions of price and quantity where the market is "balanced"

how the market equilibrium adjusts when demand/supply change

a table that shows how much of a good/service consumers want to buy at different prices

graphical representation of the demand schedule

the amount that consumers wish to buy at a specific price

a higher price reduces the quantity demanded; a lower price increases the quantity demanded, ceteris paribus

a graph plotting the quantity of an item that someone plans to buy at each price

Buy more of an item if its marginal benefit is greater than or equal to the price, keep buying until: price=marginal benefit

a graph plotting the total quantity of an item demanded, by the entire market, at each price

Always downward sloping

A good for which higher income causes an increase in demand

A good for which higher income causes a decrease in demand

a graph plotting the quantity of an item that a business plans to sell at each price

illustrates the trade-offs you experience when deciding how to allocate scarce resources

the effect that occurs when a good becomes more useful when other people use it

Good becomes less valuable when other people use it

Always upward sloping

the tendency for the quantity supplied to be higher when the price is higher

costs that vary with quantity of output (included in marginal cost)

Costs that don't vary when the quantity of output changes

The marginal product of an input as you use more of that input

graph plotting the total quantity of an item supplied by the entire market at each price

growth that occurs when businesses figure out how to produce more output with fewer inputs

a measure of how responsive buyers are to price changes

measures how sensitive quantity demanded is to price changes of other goods

measures how sensitive quantity demanded is to changes in income

measures how responsive sellers are to price changes

the burden of being assigned by the government the responsibility of sending a tax payment

the burden created by the change in after-tax prices faced by buyers and sellers

the division of the economic burden of a tax between buyers and sellers

a payment made by the government to those who make a specific choices

Your best choice depends on the other choices you make, the choices others make, developments in other markets, and expectations about the future

how different alternatives are described

can lead you astray and can make identical choices seem different

the total benefits minus the total costs flowing from a decision

a guide to decision-making which states that an individual should undertake an activity only if the additional benefit of doing so is greater than or equal to the additional cost of doing so.

Decisions about quantities are best made incrementally. You should break "how many" questions into a series of smaller decisions, weighing marginal benefits and marginal costs.

A maximum price that sellers can charge

A minimum price that sellers can charge.

A price ceiling that prevents the market from reaching the market equilibrium price.

A price floor that prevents the market from reaching the equilibrium price

A minimum or maximum quantity that can be sold

A requirement to buy or sell a minimum amount of a good

A limit on the maximum quantity of a good that can be sold.