Economics Final Exam Defintion Quizlet
Clayton Act
Prevents anticompetitive practices even earlier by targeting price discrimination, limit further mergers and acquisitions, and limit membership on boards of companies in particular situations
Sherman Act
Prohibits activities that restrict interstate commerce and competition in the marketplace; outlaws any contract, conspiracy, or combination of business interests in restraint of foreign or interstate trade
law of demand
Quantity purchased varies inversely with price (downward sloping)
law of supply
Quantity sold varies directly with price (upward sloping)
Scientific Method
Question, Research, Hypothesis, Experiment, Analysis, Conclusion, Communication
Labor supply
Refers to the number of hours a worker is willing and able to work in a given period for a given wage rate
Elasticity Determinants
1. Availability of substitutes 2. Luxury vs necessity 3. Proportion of income spent on the good 4. How much time has elapsed since the price change
Perfect competition assumptions
1. Many buyers and sellers 2. Free entry and exit 3. Identical goods 4. Knowledge of prices
Monopsony
A market situation in which there is only one buyer.
HHI
A measure of the size of firms in relation to the industry they are in; an indicator of the amount of competition among them
Tragedy of the Commons
A situation in which individuals with access to a public (or common) resource act in their own interest and, in doing so, ultimately deplete this resource.
Moral Hazard
A situation in which one party engages in risky behavior or fails to act in good faith because itknows the other party bears the economic consequences of their behavior.
Post Hoc Ergo Propter Hoc Fallacy
An assumption that one thing caused another merely because the first thing preceded the other.
elasticity
An economic measure of how sensitive one economic factor is to changes in another.
Positive and Negative Externalities
An indirect cost or benefit to an uninvolved third party.
Fallacy of Composition
An inference that something is true of the whole because it is true of part of the whole.
Adverse selection
An unequal distribution of benefits to buyers and sellers as a result of having different information; sellers have information that buyers do not have, or vice versa.
labor demand
Determines how many workers an employer is willing and able to hire at a given time and wage rate
Market for lemons
No buyer can accurately assess the value of a product through examination before a sale is made; sellers know more than buyers.
Monopoly
The exclusive possession or control of the supply of or trade in a commodity or service.
Opportunity Cost
The loss of potential gain from other alternatives when one alternative is chosen.
Short Run Supply Curve
The portion of a firm's Marginal Cost curve that lies above the Average Variable Cost curve.
Economics
The study of scarcity and its implications for the use of resources, production of goods and services, growth of production and welfare over time, and a great variety of other complex issues of vital concern to society
elasticity relationship with total revenue
Total revenue is maximized at the price where elasticity of demand is equal to one (unit elastic).
Pareto Efficiency
When an economy has its resources and goods allocated to the maximum level of efficiency, and no change can be made without making someone worse off.
Remedies
a situation where one party seeks to recover damages from another party.
long run
all inputs become variable, considered anything beyond the short-run
short run
at least one input is fixed, not a defined period of time
Macroeconomics
concerned with the actions of governments and countries
Microeconomics
concerned with the actions of individuals and businesses
Positive statement
what "is"
Normative statement
what "ought to be"
