Principle of Microeconomics Midterm Review

the study of how human beings coordinate their wants and desires, given the decision-making mechanism, social customs, and political realities of the society

what, and how much to produce, how to produce it, for whom to produce it.

the goods available are too few to satisfy individuals' desires

the study of individual choice, and how that is influenced by economic forces.

the study of the economy as a whole.

the additional cost to you over and above the costs you have already incurred

the additional benefit above what you've already derived

costs that you have already been incurred and cannot be recovered

the benefit that you might have gained from choosing the next-best alternative

the necessary reactions to scarcity

an economic force that is given relatively free rein by society to work through the market

the price mechanism, the rise and fall of prices that guides our actions in a market

economic forces, social and cultural forces, political and legal forces

a framework that places the generalized insights of the theory in a more specific contextual setting

a commonly held economic insight states as a law or principle

propositions that are logically true based on the assumptions in an economic model

policy rules that conclude that a particular course of action is preferable

achieving a goal as cheaply as possible

actions (or inaction) taken by the government to influence economic action

the study of what is, and how the economy works

the study of what the goals of the economy should be

the application of the knowledge learned in positive economics to achieve the goals one has determined in normative economics

marginal benefit>marginal cost= do it
marginal cost>marginal benefit= don't do it

opportunity costs increase the more you concentrate on the activity

better suited to the production of one good than to the production of another good

the formal and informal rules that constrain human economic behavior

an economic system based on private property and the market in which, in principle, individuals decide how, what and for whom to produce

the control a private individual or firm has over an asset

an economic system based on individuals' goodwill toward others, not on their own self-interest, and in which, in principle, society decides what, how and for whom to produce

an economic system based on the market in which the ownership of the means of production resides with a small group of individuals called capitalists

The market where households supply labor and other factors of production to businesses and are paid by businesses for doing so

the market where businesses provdided goods and services and sell them to households

private producing units in our society

the ability to organize and get something done

the consumer's wishes determine what's produced

what's left over from total revenue after all the appropriate costs have been subtracted

businesses that have only one owner

businesses with two or more owners

businesses that are treated as a person, and are legally owned by their stockholders, who are not liable for the actions of the corporate "person"

groups of individuals living together and making joint decisions

providing a stable set of institution and rules
promoting effective and workable conditions
correcting for externalities
ensuring economic stability and growth
providing public goods
adjusting for undesirable market results

the effect of a decision on a third party not taken into account by the decision maker

externalities that affect the levels of unemployment,inflation, or growth in the economy as a whole

a good that if supplied to one person must be supplied to all and whose consumption by one individual doest not prevent its consumption by another individual.

a good that, when consumed by one individual, cannot be consumed by another individual

situations in which the market does not lead to a desired result

situations in which the goverment intervenes and makes things worse

corporations with substantial operations on both the production and sales sides in more than one contry

an organization designed to achieve international cooperation but it has no ability to tax or enforce its policies on its members

a multinational, international financial institution that works to secure loans for developing countries

the quantity of a good demanded is inversely related to the good's price

a schedule of quantities of a good that will be bought per unit of time at various prices, other things constant

a specific amount that will be demanded per unit of time at a specific price, other things constant

the graphical representation of the effect of anything other than price on demand

quantity supplied rises as price rises, other things constant.
quantity supplied falls as price falls. other things constant

a concept in which opposing dynamic forces cancel each other out

quantity supplied is greater than quantity demanded

a government imposed limit on how high a price can be charged

a price ceilings on rents,set by government

government-imposed limits on how low a price can be charged

laws specifying the lowest wage a firm can legally pay an employee

a tax that is levied on a specific good

excise on an imported good

the person who receives the good differs from the person paying for good.

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the false assumtion that what is true for a part will also be true for the whole