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| | ===Easy=== | | ===Easy=== |
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| − | definitions: economics, competition, efficiency, microeconomics (the study of individual “micro” market decisions, companies, consumers) | + | *definitions: economics, competition, efficiency, microeconomics (the study of individual “micro” market decisions, companies, consumers) |
| − | | + | *scarcity: wants exceed free availability. Scarcity is what makes economics meaningful. |
| − | opportunity cost | + | *opportunity cost |
| − | | + | *transaction cost |
| − | transaction cost | + | *rational economic action |
| − | | + | *P (price) & Q (quantity or output) |
| − | rational economic action | + | *graphing supply and demand curves (with P on y-axis, and Q on x-axis) |
| − | P (price) & Q (quantity or output) | + | *supply meets demand: this defines the market price and quantity in a free, competitive market |
| − | | + | *demand side |
| − | graphing supply and demand curves (with P on y-axis, and Q on x-axis) | + | *Law of Demand: when price goes up, then demand goes down. YOU MUST USE THIS LAW. |
| − | | + | *equilibrium |
| − | supply meets demand: this defines the market price and quantity in a free, competitive market | + | *supply side |
| − | | + | *concept of a "firm" = company = supplier = seller |
| − | scarcity: wants exceed free availability. Scarcity is what makes economics meaningful.
| + | *"inputs" into production by a firm |
| − | | + | *marginal benefit of a firm’s output decision for producing one more Q: marginal benefit is P (price it is sold at) |
| − | utility
| + | *stated another way: point at which firms sell their goods (where MR=MC) |
| − | | + | *utility |
| − | net benefits
| + | *net benefits (excess of benefits over costs) |
| − | | + | *substitutes |
| − | equilibrium | + | *complements |
| − | | + | *accounting profit (total revenue minus explicit cost) |
| − | firm = company = supplier = seller | + | *economic profit (total revenue minus both explicit and implicit costs) |
| − | | |
| − | marginal benefit of a firm’s output decision for producing one more Q: marginal benefit is P (price it is sold at) | |
| − | | |
| − | Law of Demand: when price goes up, then demand goes down. YOU MUST USE THIS LAW.
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| − | supply side
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| − | demand side
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| − | substitutes
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| − | complements
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| − | economic point at which firms sell their goods (where MR=MC)
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| − | accounting profit (total revenue minus explicit cost) | |
| − | | |
| − | economic profit (total revenue minus both explicit and implicit costs) | |
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| | ===Medium=== | | ===Medium=== |
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| | :LRAC = P x (I / Q), where I is input and Q is output and P is price of the input | | :LRAC = P x (I / Q), where I is input and Q is output and P is price of the input |
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| − | == Excise Taxes and "Deadweight Loss" == | + | == Review == |
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| − | <Define and explain these two concepts>
| + | "Variable" costs "vary with the amount of output. |
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| − | There is a sample problem about this in the last section below.
| + | "Returns to scale" is in the "long run" and has nothing to do with "marginal" effects. The term is "deceasing" returns to scale when productivity does not increase as fast as costs when the size of a firm is increased. The term "diminishing" is a "marginal" concept that applies to the very different concept of "diminishing marginal utility." |
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| | == Applying Economic Insights to Politics == | | == Applying Economic Insights to Politics == |