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Consumers and Producers flashcards
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- What is meant by “Budget constraint” in this lesson?Consumer choices
- A budget constraint describes affordable combinations at given prices and income.
- What is meant by “Utility” in this lesson?Consumer choices
- Utility represents satisfaction or preference in a model rather than a directly comparable happiness score.
- What is meant by “Diminishing marginal utility” in this lesson?Consumer choices
- Additional units may provide smaller added satisfaction under specified conditions.
- What is meant by “Consumer surplus” in this lesson?Consumer choices
- Consumer surplus is willingness to pay above the amount actually paid in a market model.
- What is meant by “Search cost” in this lesson?Consumer choices
- Search costs include time or resources used to find and compare options.
- What is meant by “Information asymmetry” in this lesson?Consumer choices
- Information asymmetry occurs when parties possess different relevant information.
- What is meant by “Total revenue” in this lesson?Costs and revenue
- Total revenue equals selling price times units sold for one uniform-price product.
- What is meant by “Fixed cost” in this lesson?Costs and revenue
- A fixed cost does not change with output over the specified range and period.
- What is meant by “Variable cost” in this lesson?Costs and revenue
- A variable cost changes with the amount produced.
- What is meant by “Profit” in this lesson?Costs and revenue
- Profit equals revenue minus the relevant measure of total cost.
- What is meant by “Average cost” in this lesson?Costs and revenue
- Average cost is total cost divided by output.
- What is meant by “Sunk cost” in this lesson?Costs and revenue
- A sunk cost is already incurred and cannot be recovered by the current choice.
- What is meant by “Entry” in this lesson?Competition
- Entry occurs when a firm begins supplying a market.
- What is meant by “Exit” in this lesson?Competition
- Exit occurs when a firm stops supplying a market.
- What is meant by “Product differentiation” in this lesson?Competition
- Differentiation makes products distinct in features, service, branding, or perceived quality.
- What is meant by “Price competition” in this lesson?Competition
- Price competition uses price changes to attract customers.
- What is meant by “Nonprice competition” in this lesson?Competition
- Nonprice competition uses attributes other than price to attract buyers.
- What is meant by “Barrier to entry” in this lesson?Competition
- A barrier to entry makes it difficult for new suppliers to compete.