| A | B |
|---|
| Antitrust law | government regulation intended to maintain competitive markets and discourage unfair accumulation of market power |
| Budget constraint | the combinations of goods and services an individual is able to buy, given prices and the amount of money available to spend |
| Command-and-control approach | an approach to regulation that directly specifies certain market outcomes and activities to achieve desirable goals |
| Complements | two inputs that are used together, such that when the price of one goes up, a cost-minimizing business uses less of the other |
| Corruption | bribery and other illegal activities intended to influence government action |
| Cost minimization | the process of choosing the lowest-cost way of producing a given level of output |
| Deregulation | a reduction of government control over markets |
| Diminishing marginal utility | the tendency for marginal utility to decline as the consumption of a good or service increases |
| Externalities | the impact that the actions of an individual or a business can have on others; secondary consequences of actions |
| Free-rider problem | occurs when individuals benefit from a public good that they have not helped to pay for |
| Incentive problem | the potential lack of pressure on public sector managers because governments don’t need to make a profit |
| Income redistribution | a policy of transferring income from high-income households to low-income households |
| Inefficiency of taxation | the reduction in production and sale which typically results from imposing a tax on a good or service |
| Lack of flexibility and innovation | the lack of incentive in the public sector to put technological breakthroughs into widespread use |
| Marginal utility | the added amount of utility an individual gets from one more unit of consumption of a good or service, holding everything else constant |
| Market regulation | the role of the government in setting the basic rules for market competition |
| Mixed economy | mainly market-based economy but also include a significant role for government |
| Negative externalities | an undesirable impact that an economic activity can have on others |
| Network externalities | how the decision of a person to use a network affects the value of that network to other people |
| New Deal | a collection of public programs that President Franklin Roosevelt instituted to alleviate economic suffering during the Great Depression |
| Oil price shock | October, 1973 the Organization of Petroleum Exporting Countries (OPEC) put an embargo on oil shipments to the United States and several European countries that supported Israel which affected oil supplies and caused a sharp run-up in the price of gasoline and other petroleum products |
| Positive externalities | a desirable impact that an economic activity can have on others |
| Price elasticity of demand | the percentage change in quantity demanded that results from a 1 percent change in price; how much consumers respond to price |
| Price elasticity of supply | the percentage change in quantity supplied given a 1 percent change in price |
| Private sector | includes privately owned businesses |
| Public goods | goods and services that benefit many people in a city, region, or country to some degree |
| Public sector | includes the federal, state, and local levels of government, which collect taxes, employ workers, allocate money, regulate industries, and participate actively in the economy (U.S.) |
| Rational individual | a person who maximizes his or her utility, subject to a budget constraint |
| Redistribution | the transfer of money from high-income to low-income households |
| Regulation | government control over markets |
| Rent-seeking behavior | the expenditure of money by businesses and individuals trying to influence the government |
| Substitute | two inputs are substitutes if a business will use more of one when the price of the other rises |
| Tax incidence | the people or businesses who ultimately have to pay a tax |
| Utility function | the link between the goods and services a person consumes and his or her utility |
| Utility | a measure of the physical and emotional benefits a person gets from consumption |
