Download Economics Terms: Goods, Markets, and Consumer Behavior and more Quizzes Development Economics in PDF only on Docsity! TERM 1 Excludable Good DEFINITION 1 People can be prevented from using the good. TERM 2 Rival in Consumption DEFINITION 2 One person's use of the good reduces another person's ability to use it. TERM 3 Private Goods DEFINITION 3 Both excludable and rival in consumption. TERM 4 Public Goods DEFINITION 4 Neither excludable or rival in consumption TERM 5 Common Resources DEFINITION 5 Rival in consumption but not excludable TERM 6 Natural Monopoly DEFINITION 6 When a good is excludable but not rival in consumption TERM 7 Free Rider DEFINITION 7 A person who receives the benefit of a (public) good without paying for it. TERM 8 Cost-Benefit Analysis DEFINITION 8 A study that estimates the total costs and benefits of a project to society as a whole. TERM 9 Tragedy of the Commons DEFINITION 9 When one person uses a common resource, he or she diminishes other people's enjoyment of it. Because of this negative externality, common resources tend to be used excessively. TERM 10 Efficiency DEFINITION 10 The property of society getting the most it can from its scarce resources. TERM 21 Macroeconomics DEFINITION 21 Study of the economy as a whole TERM 22 Positive statements DEFINITION 22 Factual statements. statements saying how it is TERM 23 Normative Statements DEFINITION 23 statements saying how it should be. TERM 24 Price Takers DEFINITION 24 Buyers and sellers must accept the price the market determines ( occurs in perfectly competitive markets) TERM 25 Law of Demand DEFINITION 25 The claim that, other things equal, the quantity demanded of a good falls when the price of the good rises. TERM 26 Demand Schedule DEFINITION 26 A table that shows the relationship between the price of a good and the quantity demanded TERM 27 Normal Good DEFINITION 27 A good for which, other things equal, an increase in income leads to an increase in demand. TERM 28 Inferior Good DEFINITION 28 A good for which, other things equal, an increase in income leads to a decrease in demand TERM 29 Substitutes DEFINITION 29 Two goods for which an increase in the price of one leads to an increase in the demand for the other. TERM 30 Complements DEFINITION 30 Two goods for which an increase in the price of one leads to a decrease in the demand for the other. TERM 31 Law of Supply DEFINITION 31 The claim that, other things equal, the quantity supplied of a good rises when the price of the good rises TERM 32 Supply Schedule DEFINITION 32 A table that shows the relationship between the price of a good and the quantity supplied. TERM 33 Law of supply and demand DEFINITION 33 The claim that the price of any good adjusts to bring the quantity supplied and the quantity demanded for that good into balance. TERM 34 Price elasticity of demand DEFINITION 34 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. TERM 35 Price Ceiling DEFINITION 35 A legal maximum on the price at which a good can be sold.
