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Econ Final Exam Chapters 1-6


undefined, object
copy deck
the most desirable alternative given up as a result of a decision
opportunity cost
limited quantities of resourves to meet unlimited wants
a graph that show alternative ways to use an economy's resources
productions possibilites curve
using fewer resources than an economy is capable of using
actions or activities that one person performs for another
physical objects such as clothes or shoes
the effort that people devote to a task for which they are paid
using resources in such a way as to maximize the production of goods and services
the three goods and services that are used to make goods and services
factors of production
a situation in which a good or service is unavailable
the line on a production possibilities graph that shows the maximum possible output
production possibilities frontier
limited quantities of resources to meet unlimited wants
the total value of all final goods and services produced in a particular economy
gross domestic product (GDP)
the concerns of the public as a whole
public interest
requires companies to provide full information about their products
public disclosure laws
someone who would not choose to pay for a certain good or service but would get the benefits if it were provided as a public good
free rider
goods and services produced for free or at greatly reduced prices
in-kind benefits
the part of the economy that involves the transactions of individuals and businesses
private sector
an income level below which income is insufficient to support families or households
poverty threshold
the study of the behavior and decision making of entire economics
a graphic representation of a demand schedule
demand curve
goods that are used in place of one another
consumers buy more of a good when its price decreases and less when its price increases
law of demand
a measure of how consumers react to a change in price
elasticity of demand
when consumers react to an increase in a good's price by consuming less of that good and more of other goods
substitution effect
the total amount of money a firm receives by selling goods or services
total revenue
two goods that are bought and used together
a good that consumers demand more of when their income increases
normal good
a graph of the quantity supplied of a good by all suppliers
market supply curve
the amount a supplier is willing and able to supply at a certain price
quantity supplied
fixed costs plus variable costs
total cost
a factor that can change
government intervention in a market that affects the production of a good
a level of production in which the marginal product of labor increases as the number of workers increase
increasing marginal return
the additional income from selling one more unit of a good; sometimes equal to price
marginal revenue
a chart that lists how much of a good a supplier will offer at different prices
supply schedule
the change in output from hiring one additional unit of labor
marginal product of labor
when quantity supplied is not equal to quantity demanded in a market
the financial and opportunity costs consumers pay when searching for a good or service
search costs
a price ceiling placed on rent
rent control
a situation in which the quantity demanded is greater than the quantity supplied, also known as excess demand
a situation in which quantity supplied is greater than quantity demanded, also known as excess supply
any factor that makes it difficult for a new firm to enter a market
barrier to entry
making a product different from other similar products
the right to sell a good or service within an exclusive market
an illegal grouping of companies that discourages competition
factors that cause a producer's average cost per unit to fall as output rises
economies of scale
a series of competitive price cuts that lowers the market price below the cost of production
price war
a market structure in which a large number of firms all produce the same product
perfect competition
a market structure in which a few large firms dominate a market

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