Quiz 5 Flashcards Preview

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Flashcards in Quiz 5 Deck (18)
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1
Q

all the consumption bundles available to a consumer who spends all of their income

A

budget line

2
Q

the cost of a consumer’s consumption bundle cannot exceed the consumer’s income

A

budget constraint

3
Q

the set of all consumption bundles that are affordable, given a consumer’s income and prevailing prices

A

consumption possibilities

4
Q

cost that does not depend on the quantity of output produced. It is the cost of the fixed input.

A

fixed cost

5
Q

the time period in which all inputs can be varied

A

long run

6
Q

the change in total utility generated by consuming one additional unit of a good or service

A

marginal utility

7
Q

a graphical representation showing how marginal utility depends on the quantity of a produce consumed

A

marginal utility curve

8
Q

additional utility from spending one more dollar on a product

A

marginal utility per dollar

9
Q

the consumption bundle that maximizes the consumer’s total utility given their budget constraint

A

optimal consumption bundle

10
Q

when a consumer maximizes utility, the marginal utility per dollar spend must be the same for all products in the consumption bundle

A

optimal consumption rule

11
Q

the proposition that each successive unit of a product consumed adds less to total utility than does the previous unit

A

principle of diminishing marginal utility

12
Q

the time period in which at least one input is fixed

A

short-run

13
Q

a measure of the satisfaction derived from consumption of products

A

utility (of a consumer)

14
Q

a unit of utility

A

util

15
Q

the distribution of the tax burden

A

tax incidence

16
Q

tax that doesn’t depend on the taxpayer’s income

A

lump-sum tax

17
Q

losses associated with quantities of output that are greater than or less than the efficient level, as can result from market intervention such as taxes, or from externalities such as pollution

A

deadweight loss

18
Q

the resources used (which is a cost) by government to collect the tax, and by taxpayers to pay it, over and above the amount of the tax, as well as to evade it

A

administrative costs