Exam (elaborations)
Microeconomics Exam #1 Chapter 1-5
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Microeconomics Exam #1 Chapter 1-5
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Microeconomics Exam #1 Chapter 1-5
Ceteris Paribus - -Latin phrase that translates approximately to "holding
other things constant" and is usually rendered in English as "all other things
being equal". In economics and finance, the term is used as a shorthand for
indicating the effect of one economic variable on another, holding constant
all other variables that may affect the second variable.
-Change in Demand - -A change in the quantity of a good that the buyers
are willing and able to purchase that is caused by a change in some
condition other than the price of that good a shift in the demand curve.
-Change in Quantity Demanded - -A change in the quantity of a good that
buyers are willing and able to purchase that results from a change in the
goods price, other things being equal, shown by a movement from one point
to another along a demand curve.
-Comparative Advantage - -The ability to produce a good or service at a
relatively lower opportunity cost than someone else.
-Consumer Surplus - -The difference between the maximum that a would be
willing to pay for a unit of a good and the amount that he or she actually
pays.
-Producer Surplus - -The difference between what producers receive for a
unit good and the minimum they would be willing to accept.
-Consumer Equilibrium - -A state of affairs in which a consumer cannot
increase the total utility gained from a given budget by spending less on one
good or more on another.
-Determinants of Demand - -1) Expectations 2) Tastes & Preference 3)
Income 4) Number of buyers 5) Price of other goodsv6) Substitutes 7)
Compliments
-Diminishing Marginal Utility - -A law of economics stating that as a person
increases consumption of a product, while keeping consumption of other
products constant, there is a decline in the marginal utility that person
derives from consuming each additional unit of that product.
-Economic Profit - -The difference between the revenue received from the
sale of an output and the opportunity cost of the inputs used. This can be
used as another name for "economic value added" (EVA).
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