| A | B |
|---|
| barriers to entry | conditions that prevent firms from freely entering or exiting a market |
| variable cost | a cost of production that depends on the quantity produced |
| cartel | an agreement between suppliers to restrict production and raise prices |
| tragedy of the commons | the depletion of a common resource due to overuse |
| Coase Theorem | the proposition that if private parties can bargain without cost over the allocation of resources, then they can solve the problem of externalities on their own |
| rival goods | goods or services characterized by the fact that one person's enjoyment of the good or service reduces the quantity available for the others' enjoyment |
| comparative advantage | the ability to produce a good or service at a lower opportunity cost than other producers |
| rent seeking | using political influence to increase one's economic profits at the expense of others |
| deadweight loss | the reduction in total surplus that results from a market distortion such as a tax |
| public good | a good or service for which it is not possible to establish individual property rights |
| diminishing returns to scale | the property whereby each additional increase in inputs results in a smaller increase in the quantity produced |
| production possibility frontier (PPF) | a graphical depiction of the combinations of output that can be produced by an economy |
| economic profit | the difference between the revenue realized by a producer and the opportunity cost of production |
| price discrimination | when a business sells the same product to different buyers at different prices |
| entrepreneur | an individual who takes on the risk of attempting to create new products or services, establish new markets, or develop new methods of production |
| oligopoly | a market in which there are just a few producers |
| excludability | the ability to prevent buyers from enjoying the benefits of consuming a good or service without paying for it |
| monopoly | a market in which there is a single producer |
| externality | when the action of one person affects the well-being of someone else, but where neither party pays nor is paid for these effects |
| monopolistic competition | a market in which there is free entry or exit, but every producer supplies a differentiated product and faces a downward sloping demand curve |
