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econ
econ final
28 cards·by gunnerh11
Production Possibilities Frontier
A line or curve that shows all the possible combinations of two outputs that can be produced
using all available resources
Absolute Advantage
the ability to produce more of a good or service than others can with a given amount of
resources.
Comparative Advantage
the ability to produce a good or service at a lower opportunity cost than others.
Gains From Trade
the improvement in outcomes that occurs when producers specialize and exchange goods and
services
Demand
describes how much of something people are willing and able to buy under certain
circumstances.
Supply
describes how much of a good or service producers will offer for sale under given
circumstances
Equilibrium
the situation in a market when the quantity supplied equals the quantity demanded.
Consumer Surplus
the net benefit that a consumer receives from purchasing a good or service, measured by the
difference between willingness to pay and the ac
Producer Surplus
the net benefit that a producer receives from the sale of a good or service, measured by the
difference between the producers willingness to
Dead Weight Loss
a loss of total surplus that occurs because the quantity of a good that is bought and sold is
below the market equilibrium quantity.
Price Ceiling
a maximum legal price at which a good can be sold.
Price Floor
a minimum legal price at which a good can be sold.
Profit
the difference between total revenue and total cost.
Total Revenue
the amount that a firm receives from the sale of goods and services, calculated as the quantity
sold multiplied by the price paid for each u
Total Cost
- the amount that a firm pays for all of the inputs that go into producing goods and services.
Fixed Cost
costs that do not depend on the quantity of output produced.
Variable Cost
costs that depend on the quantity of output produced.
Marginal Product
the increase in output that is generated by an additional unit of input.
MR
marginal revenue, the revenue generated by selling an additional unit of a good.
Perfectly Competitive Market
no ability to set their own price, and goods and services are standardized.
Monopoly
a firm that is the only producer of a good.
Oligopoly
a market with only a few firms, which sell a similar good or service.
Factors of Production
the ingredients that go into making a good or service.
GDP
the sum of the market values of all final goods and services produced within a country in a given
period of time
GNP
- the sum of the market values of all final goods and services produced and capital owned by the
permanent residents of a country in a given
Real
GDP calculation in which goods and services are valued at constant prices.
Nominal
GDP calculation in which goods and services are valued at current prices
Deflator
a measure of the overall change in prices in an economy, using the ratio between real and
nominal GDP.