frequent-绣
I. Definitions
1. opportunity
cost (P6)
Whatever must be given up to
obtain some item.
2. market economy
(P9)
An economy that allocates
resources through the decentralized decisions of
many firms
and households as they
interact in markets for goods and services.
3. law of demand (P65)
The
claim that, other things equal, the quantity
demanded of a good falls when the price of
the good rises.
4. normal
good (P68)
A
good
for
which,
other
things
equal,
an
increase
in
income
leads
to
an
increase
in
demand.
5. inferior good
(P68)
A
good
for
which,
other
things
equal,
an
increase
in
income
leads
to
a
decrease
in
demand.
6. price elasticity
of demand (P90)
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.
7. price ceiling
(P114)
A legal maximum on the price at
which a good can be sold.
8. price
floor (P114)
A legal minimum on the
price at which a good can be sold.
9.
consumer surplus (P139)
The amount a
buyer is willing to pay for a good minus the
amount the buyer actually pays
for it.
10. producer surplus (P144)
The amount a seller is paid for a good
minus the seller
’
s cost of
providing it.
11. explicit costs (P269)
Input costs that require an outlay of
money by the firm.
12. implicit costs
(P269)
Input costs that do not require
an outlay of money by the firm.
13.
economics of scale (P281)
The property
whereby long-run average total cost falls as the
quantity of output increases.
14.
diseconomies of scale (P281)
The
property
whereby
long-run
average
total
cost
rises
as
the
quantity
of
output
increases.
15. natural
monopoly (P314)
A monopoly that arises
because a single firm can supply a good or service
to an entire
market at a smaller cost
than could two or more firms.
16.
indifference curves
An indifference
curve is a curve that shows consumption bundles
that give the consumer
the same level
of satisfaction.
17. budget
constraint
The budget constraint shows
the various combinations of goods the consumer can
afford
given his or her income and the
prices of the two goods.
the
market
value
of
all
final
goods
and
services
produced
within
a
country
in
a
given
period of time. (p510)
a measure of the overall cost of the
goods and services bought by a typical consumer.
(p530)
ate-demand curve
a
curve
that
shows
the
quantity
of
goods
and
services
that
households,
firms,
the
government, and
customers abroad want to buy at each price level.
(p745)
ry neutrality
the
proposition that changes in the money supply do
not affect real variables. (p668)
ng-
out effect
the
offset
in
aggregate
demand
that
results
when
expansionary
fiscal
policy
raises
the
interest rate and thereby reduces
investment spending. (p790)
lier effect
the
additional
shifts
in
aggregate
demand
that
result
when
expansionary
fiscal
policy
increases income and
thereby increases consumer spending. (p787)
tic stabilizers
changes in
fiscal policy that stimulate aggregate demand when
the economy goes into a
recession
without policymakers having to take any deliberate
action. (p796)
II. Theories
1.
income and substitution effects as price changes
2. price control of
government
3. the
consumer
’
s optimal choice
4. the relationship between
elasticity and revenue
5.
the short equilibrium and long one of competitive
firms
6. the welfare cost
of monopoly
III. Exercises
1.
P285. 1,11
a. opportunity cost; b.
average total cost; c. fixed cost; d. variable
cost; e. total cost;
f.
marginal cost.