Sei sulla pagina 1di 2

Convex Set – set of points which it is the case that any convex combination of two points within the

set
also lies within the set.

Demand Curve – graph that relates quantity demanded (on horizontal axis) to price (on the vertical axis)

Complements – goods that tends to be consumed together by consumers or inputs that tend to be used
together in production

Wages – for firms, the price of labor; for workers, the opportunity cost of leisure

Market – structure that permits buyer and seller to trade

Equilibrium – economic environment which everyone doing the best they can given to the
circumstances they face

Game theory – subfield of economics that develop tools for investigating strategic decision making

Price Ceiling – a maximum legal price

Price floor – minimum legal price

Subsidy – government financial assistance that take form of cash payment and/or price subsidy

Price Gouging – popular term used to denote moral outrage at charging of high prices during periods of
supply disruption.

Econometrics – subfield in economics that investigates how to employ statistical techniques to test
economic model

Saving – difference between current income and current consumption

Positive Economics – branch of economics whose purpose is to predict behavior and equilibrium
consequences

Normative Economics – subfield of eco that intersects with philosophy in that it asks “what is good”

Efficient – situation that cannot be changed in a way that would make some people better off w/o
making anyone worse off – same as pareto efficient

Industrial Organization – subfield in economics that investigates competition in diff types of industry
structure

Capital – variety of non-labor inputs into production, including financial capital and physical capital
(plant and equipment)

Circumstances – constraints faced by someone who has to make a choice

Tastes – ranking of consumption bundles, also called preferences

Interest Rates – price using financial capital

Opportunity Cost – what someone gives up by undertaking an activity; called economic cost/cost
Substitution Effects – in consumer theory, portion of response to a price change that is due solely to
change in opportunity cost.

Distortionary – refers to a policy that alters prices and thus the opportunity costs faced by individuals.

Labor Supply – supply of labor by workers who trade off consumption and leisure

Consumer Surplus – difference bet. what a consumer would have been willing to pay and what he or she
had to pay for the quantity of good that he or she purchase

Marginal Willingness to pay – willingness to pay for one more or for the last unit of consumption good.

Compensated Demand – holding utility constant, consumers demand under assumption that as the price
change, the consumer will receive just enough income.

Choice Set – set of feasible alternatives

Exogenous – given from the outside system, budgets that are fixed at some dollar value independent of
other economic variables

Total expenditures – the sum of all expenses including sunk costs

Budget constraints – set of possible alternatives that are affordable when the entire budget is used

Composite good – artificial or hypothetical good that takes the place of all other consumption

Endowment – assets that can be sold to generate income for consumption

Endogenous – arising from within the system

Tax Deductions – amount that can be deducted from a persons taxable income that used to calculate
the persons tax obligation

Tax credits – amount that can be deducted from the taxpayer’s obligation prior to tax payment being
made

Price subsidy – a subsidy that lowers the price for consumer

Budget Sets – set of possible alternatives that are affordable

Compound interest – interest in future periods on interest earned this period

Potrebbero piacerti anche