Tuesday, March 20, 2007

Key terms

Key terms to know for the exam on Wed are the following (we went over this in class, so this should just be a refresher)

Opportunity Cost
Demand - how it slopes and the reasons
a) substitution effect
b) income effect
c) marginal benefit
Supply - how it slopes and the reasons
a) marginal cost per additional unit
a) negative
b) positive
Public Good
a) Price
b)Cross Price
c) Income
d) Supply
Asymmetical information
Moral Hazard
Rational Ignorance.

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