University of Iowa: Microeconomics Exam 1 (Chapters 1-6)

the limited nature of society's resources

the study of how society manages its scarce resources

the property of society getting the most it can from its scarce resources

the property of distributing economic prospertity uniformly among the members of society

whatever must be given up to obtain some item

people who systematically and purposefully do the best they can to achieve their objectives

a small incremental adjustment to a plan of action

something that induces a person to act

an economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services

the ability of an individual to own and exercise control over scarce resources

a situation in which a market left on its own fails to allocate resources efficiently

the impact of one person's actions on the well-being of a bystander

the ability of a single economic actor (or small group of actors) to have a substantial influence on market prices

the quantity of goods and services produced from each unit of labor input

an increase in the overall level of prices in the economy

fluctuations in economic activity, such as employment and production

a visual model of the economy that shows how dollars flow through markets among households and firms

a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology

the study of how households and firms make decisions and how they interact in markets

the study of economy-wide phenomena, including inflation, unemployment, and economic growth

claims that attempt to describe the world as it is

claims the attempt to prescribe how the world should be

the ability to produce a good using fewer inputs than another producer

the ability to produce a good at a lower opportunity cost than another producer

goods produced abroad and sold domestically

goods produced domestically and sold abroad

a group of buyers and sellers of a particular good or service

a market in which there are many buyers and many sellers so that each has a negligible impact on the market price

the amount of a good that buyers are willing and able to purchase

the claim that, other things being equal, the quantity demanded of a good falls when the price of the good rises

a table that shows the relationship between the price of of a good and the quantity demanded

a graph of the relationship between the price of a good and the quantity demanded

a good for which, other things being equal, an increase in income leads to an increase in demand

a good for which, other things being equal, an increase in income leads to a decrease in demand

two goods for which an increase in the price of one leads to an increase in the demand for the other

two goods for which an increase in the price of one leads to a decrease in the demand for the other

the amount of a good that sellers are willing and able to sell

the claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises

a table that shows the relationship between the price of a good and the quantity supplied

a graph of the relationship between the price of a good and the quantity supplied

a situation in which the market price has reached the level at which quantity supplied equals quantity demanded

the price that balances quantity supplied and quantity demanded

the quantity supplied and the quantity demanded at the equilibrium price

a situation in which quantity supplied is greater than quantity demanded

a situation in which quantity demanded is greater than quantity supplied

the claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for the good into balance

a measure of the responsiveness of quantity demanded or quantity supplied to a change in one of its determinants

a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price

the amount paid by buyers and received by sellers of a good, computed as the price of the good times the quantity sold

a measure of how much the quantity demanded of a good responds to a change in consumers' income, computed as the percentage change in quantity demanded divided by the percentage change in income

a measure of how much the quantity demanded of one good responds to a change in the price of another good, computed as the percentage change in quantity demanded of the first good divided by the percentage change in price of the second good

a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price

a legal maximum on the price at which a good can be sold

a legal minimum on the price at which a good can be sold

the manner in which the burden of a tax is shared among participants in a market