Microeconomics

Created by: carmentaan_
Created on: 20-02-23 19:06

Allocative Efficiency

Achieved when just the right amount of goods and services are produced from society’s point of view so that scarce resources are allocated in the best possible way. It is achieved when, for the last unit produced, price (P) is equal to marginal cost (MC),

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Complements

Goods that are jointly consumed, for example, coffee and sugar.

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Demand

The relationship between possible prices of a good or service and the quantities that individuals are willing and able to buy over some time period, ceteris paribus.

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Demand curve

A curve illustrating the relationship between possible prices of a good or service and the quantities that individuals are willing and able to buy over some time period, ceteris paribus. It is normally downward sloping.

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Equilibrium

A state of balance that is self-perpetuating in the absence of any outside disturbance.

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Excess demand (shortage)

Occurs when quantity demanded of a good or service at some price, is greater than quantity supplied.

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Other cards in this set

Card 2

Front

Goods that are jointly consumed, for example, coffee and sugar.

Back

Complements

Card 3

Front

The relationship between possible prices of a good or service and the quantities that individuals are willing and able to buy over some time period, ceteris paribus.

Back

Card 4

Front

Back

Card 5

Front

A state of balance that is self-perpetuating in the absence of any outside disturbance.

Back

View more cards

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Microeconomics