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MicroEconomics
FINAL EXAM
21
Economics
Undergraduate 2
12/05/2013

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Cards

Term
Is a freebie or giveaway really free?
Definition
No, scarce resources are used to provide free stuff
Term
What is a major theme in economics?
Definition
Unlimited wants and limited resources
Term
What does marginal benefit mean?
Definition
extra benefit
Term
What is the ratio of price?
Definition
the slope of the line
Term
What are the factors of production?
Definition
land
labor
capital
Term
What is the sum of all marginal utility?
Definition
Total Utility
Term
How do you calculate the market demand for labor?
Definition
the sim of each firm's MRP (Demand for Labor) curve.
Term
Why is rent based on demand?
Definition
It is a fixed supply and there are different functions for land
Term
What is interest?
Definition
the price paid for the use of money
Term
Opportunity Cost
Definition
the cost of a good or service measured in terms of the forgone opportunity to pursue the best possible alternative activity with the same time or resources
Term
Economic Perspective
Definition
a way of thinking that see individuals and organizations making realistic decisions made by comparing costs and benefits that are marginal and associated with the individuals' and organizations' actions.
Term
What is Marginal Cost?
Definition
the increase in cost required to raise the output of some good or service by one unit
Term
What is efficiency in production?
Definition
a situation in which it is not possible, given available knowledge and productive resources, to produce more of one good without forgoing the opportunity to produce some of another good
Term
What is economic efficiency?
Definition
a state of affairs in which it is impossible to make any change that satisfies one person's wants more fully without causing some other person's wants to be satisfied less fully
Term
What is comparative advantage?
Definition
the ability to produce a good or service at a relatively lower opportunity cost than someone else
Term
What is efficiency in distribution?
Definition
a situation in which it is not possible, by redistributing existing supplies of goods, to satisfy one person's wants more fully without causing some other person's wants to be satisfied less fully
Term
What is a market?
Definition
any arrangement people have for trading with one another
Term
What is utility?
Definition
the pleasure, satisfaction, or need fulfillment that people obtain from the consumption of goods or services
Term
What is marginal utility?
Definition
the amount of added utility gained from a one-unit increase in consumption of a good, other things being equal
Term
Principle of diminishing marginal utility
Definition
the principle that the greater the consumption of some good, the smaller the increase in utility from a one-unit increase in consumption of that good
Term
Consumer Equilibrium Formula
Definition
(Marginal Utility of Good A) / (Price of Good A) = (Marginal Utility of Good B) / (Price of Good B)
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