Econ Midterm

Resources like time, money, or medical supplies are scarce because we have unlimited wants and limited resources.

The cost of the highest-valued alternative that you give up when you make a choice.

People use all available information and make the choice which makes them better off.

Comparing the additional benefits and costs of a small change in action.

Consumers choose purchases that maximize their satisfaction, given their budget constraints.

Firms choose inputs to produce output at a level that maximizes profits.

A curve that illustrates the maximum combinations of two outputs that can be produced using available inputs efficiently.

Displays the relationship between price and quantity demanded of a good within a given period.

There is an inverse relationship between quantity demanded and price.

A measure of how much consumer behavior will change as the price of a good changes.

A measure of the responsiveness of the quantity demanded of one good to the price of another.

Displays the relationship between price and quantity supplied of a good within a given period.

There is a positive relationship between quantity supplied and price.

The point where quantity demanded is equal to quantity supplied.

An artificial cap on the price of a good.

An artificially imposed minimum price.

The cost to society when supply and demand are out of equilibrium.

A market with many sellers, standardized products, and no barriers to entry.

A market with one producer that sets prices and has high barriers to entry.

The ability of an individual firm to influence price.

A market with a few sellers who have substantial market power and high barriers to entry.

A measure of market concentration or market power.

The best strategy for a player, no matter what the other player does, in game theory.

A stable state where no participant can gain by unilaterally changing their strategy.

An economic framework for how people make choices about their health.

A benefit or harm that a market transaction imposes on a third party outside the market mechanism.

Resources will be used efficiently to maximize social welfare given certain conditions.

A subsidy to encourage more consumption of goods with positive externalities.

A tax to reduce consumption of goods with negative externalities.

Using government restrictions to exclude competitors and increase profits.

A situation where one party has more or better information in a transaction than the other.

Goods where an expert knows more about what a consumer needs than the consumer.

When the interests of an agent do not align perfectly with those of the principal.

Overutilization of testing and services to protect against malpractice lawsuits.

When payers only allow beneficiaries to be treated by certain providers.

Greater competition among hospitals can increase costs without improving quality.