| A | B |
|---|
| Incentives | Matter |
| There is no such thing | as a Free Lunch |
| Voluntary Exchange Promotes | Economic Progress |
| Transaction Costs are an | Obstacle to Exchange |
| Increases in Real Income are dependent | upon Increases in Real Output |
| People earn income by | Helping Others |
| Elasticity is the measure of | consumer response to price changes |
| Money and credit are the fuel | that drives the macroeconomy |
| The baby boom after WWII led | to a housing boom |
| Price raising is usually done | by a price leader |
| balance of payments accounts | depict U.S. international trade/capital positions |
| Capital Stock: accumulated investment | of plant that is used to produce output |
| Consumer Price Index: a measure of the | prices that consumers pay for a representative basket of goods and services |
| Disposable Personal Income | Net income exclusive of income taxes |
| Federal Reserve System: institution | responsible for monetary policy |
| Law of Demand: sales of goods or services | is inversely related to its price |
| Marginal Cost: change in cost of production | relative to a unit change in output |
| Oligopoly: relatively small number | of large sellers dominating the market |
| Operative Leverage: relationship | between a firm's fixed and variable cost |
| Opportunity Cost: the amount foregone | by choosing one option over another |
| Producer Price Index: measure of | price of all goods sold in the U.S. |
| Sunk Cost: a previously incurred cost | not affected by a current decision |
| Unemployment rate: the main | measure labour force utilization |
| Variable Cost: cost incurred as the | level of output changes |
