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)

Scarcity
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
Externalities
a) negative
b) positive
Public Good
elasticity
a) Price
b)Cross Price
c) Income
d) Supply
Asymmetical information
Moral Hazard
Rational Ignorance.