Economics Terms: Scarcity, Micro and Macroeconomics, Supply and Demand, Quizzes of Economics

Download Economics Terms: Scarcity, Micro and Macroeconomics, Supply and Demand and more Quizzes Economics in PDF only on Docsity! TERM 1 Economics DEFINITION 1 Study of choices a society makes when resources are scarce. TERM 2 Scarcity DEFINITION 2 resources are limited, wants/demands are unlimited TERM 3 Microeconomics DEFINITION 3 study of how individuals and firms make decisions TERM 4 Macroeconomics DEFINITION 4 study of behavior of overall economy (economic aggregates) TERM 5 Opportunity Cost DEFINITION 5 the value of the next best alternative that you gave up because of that decision. TERM 6 Marginal DEFINITION 6 small incremental change TERM 7 Market DEFINITION 7 Any place where buyers and sellers meet to exchange goods or services. TERM 8 Positive Statement DEFINITION 8 tries to describe how the world (or economy) works --> you can test this. TERM 9 Normative Statement DEFINITION 9 claim on how the world (or economy) should work --> value judgement. TERM 10 Quantity Demanded DEFINITION 10 the amount of a good that consumers are willing and able to purchase given a certain price at a certain point in time. TERM 21 Law of Supply DEFINITION 21 States that as the price of a good rises, all else equal, the quantity supplied of that good will rise. TERM 22 Price Elasticity of Demand (PED) DEFINITION 22 responsiveness of demand to a change in different factors.Percent change in quantity demanded divided by percent change in price. TERM 23 Short run DEFINITION 23 time in which consumers cannot adjust TERM 24 Long run DEFINITION 24 consumers have time to adjust. TERM 25 Efficiency DEFINITION 25 Economy is working "at its best", and there is no waste TERM 26 Welfare DEFINITION 26 attempt to measure "happiness/benefit" to producers and consumers. Usually measured in dollars. TERM 27 Producer Surplus DEFINITION 27 difference between what a producer is willing and able to sell a good for (supply curve) and what he actually sells it for. TERM 28 Consumer Surplus DEFINITION 28 difference between what a consumer was willing and able to pay (demand curve) and what the consumer actually pays (market price). On the graph, it makes up the area under the demand curve and above the market price. TERM 29 Deadweight Loss DEFINITION 29 decrease in total surplus caused by some market distortion. TERM 30 Binding Quantity DEFINITION 30 lower quantity (demanded versus supplied) at a certain price. TERM 31 Consumer Tax Burden DEFINITION 31 amount of money consumers pay of a tax. (new price with tax- original price) TERM 32 Producer Tax Burden DEFINITION 32 amount of money producers pay of a tax. (Original price received - new price recieved after tax) TERM 33 Price Ceiling DEFINITION 33 when government sets a price, P, for a good, and legislates that a good cannot be bought/sold at a price greater than P. TERM 34 Price Floor DEFINITION 34 when government sets a price, P, for a good, and legislates that a good cannot be bought/sold at a price lower than P. TERM 35 Subsidy DEFINITION 35 an extra amount, S, paid for each unit of a good either supplied or demanded.