Term
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Definition
The self-organizing economy
Scarcity and need for choice
Choice and opportunity cost
Production possibilites boundary
Resource allocation
Specialization
The division of labour
Globalization
Traditional Economies
Command Economies
Free-market Economies
Mixed Economies |
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Term
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Definition
Positive and normative statements
Endogenous and exogenous variables
Theories and models
Variables, assumptions, and predictions
Correlation versus Causation
Functional Relations
Positive and negative relations between variables
Positively and negatively sloped curves
Marginal responses
Maximum and minimum values |
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Term
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Definition
Stock and flow variables
Ceteris Paribus or "other things being equal"
Quantity Demanded
Demand schedule and demand curve
Change in quantity demanded versus change in demand
Quantity supplied
Supply schedule and supply curve
Change in quantity supplied versus change in supply
Equilibrium, equilibrium price, and disequilibrium
Comparative statics
Relative price |
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Term
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Definition
Price elasticity of demand
Inelastic and perfectly inelastic demand
Elastic an infinitely elastic demand
Relationship between demand elasticity and total expenditure
Elasticity of Supply
Short-run and long-run responses to shifts in demand and supply
The burden of an excise tax
Consumer price and seller price
Income elasticity of demand
Normal goods and inferior goods
Luxuries and necessities
Cross elasticity of demand
Substitutes and complements |
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Term
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Definition
Partial-equilibrium analysis
General-Equilibrium analysis
Price controls: floors and ceilings
Allocation by sellers' preferences and by black markets
Rent controls
Short-run and long-run supply curves of rental accommodations
Economic surplus
Market efficiency
Inefficiency of price controls and production quotas |
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Term
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Definition
Total utility and marginal utility
Utility maximization
Equality of MU/p across different goods
Slope of the demand curve
Income effect and substitution effect
Giffen goods and conspicuous consumption goods
Consumer surplus
The paradox of value |
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Term
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Definition
Forms of business organization
Methods of financing modern firms
Profit maximization
Inputs and factors of production
Accounting versus economic profits
Economic profits and resource allocation
Short run, long run and very long run
Total product, average product and marginal product
The law of diminishing returns
Total cost, marginal cost and average cost
The relationship between productivity and cost
Short-run cost curves
Capacity |
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Term
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Definition
The implication of cost minimizing
The interpretation of MPk/MPl=pk/pl
The principle of substitution
Increasing, constant, and decreasing returns
Economies of scale
LRAC curve as an envelope of SRATC curves
Technological change and productivity growth
Changes in technology as endogenous responses |
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Term
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Definition
Competitive behaviour and competitive market structure
Perfect competition
Price taking and a horizontal demand curve
Average revenue, marginal revenue, and price under perfect competition
Rules for maximizing profits
The relationship of supply curves to marginal cost curves
Short-run and long-run equilibrium of competitive industries
Entry and exit in achieving long-run equilibrium |
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Term
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Definition
The relationship between price and marginal revenue for a monopolist
Short-run monopoly profits
Natural and created entry barriers
The process of creative destruction
Cartels as monopolies
The instability of cartels
Arbitrage
Price discrimination among units
Perfect price discrimination
Price discrimination among market segments
Hurdle pricing |
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Term
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Definition
Concentration ratios
Product differentiation
Monopolistic competition
The excess-capacity theorem
Oligopoly
Strategic behaviour
Game theory
Cooperative and non-cooperative outcomes
Nash equilibrium
Explicit and tacit collusion
Natural and firm-created entry barriers
Oligopoly and creative destruction |
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Term
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Definition
Interpersonal, interregional and international specialization
Absolute advantage and comparative advantage
Opportunity cost and comparative advantage
The gains from trade: specialization, scale economies and learning by doing
The sources of comparative advantage
Factor endowments, Acquired comparative advantage
The law of one price
The terms of trade |
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