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Solutions for Chapter 3: Making Economic Decisions

Full solutions for Explorations in Economics | 1st Edition

ISBN: 9780716701071

Solutions for Chapter 3: Making Economic Decisions

Chapter 3: Making Economic Decisions includes 10 full step-by-step solutions. Since 10 problems in chapter 3: Making Economic Decisions have been answered, more than 2012 students have viewed full step-by-step solutions from this chapter. Explorations in Economics was written by and is associated to the ISBN: 9780716701071. This expansive textbook survival guide covers the following chapters and their solutions. This textbook survival guide was created for the textbook: Explorations in Economics, edition: 1.

Key Business Terms and definitions covered in this textbook
  • average tax rate

    total taxes paid divided by total income

  • comparative advantage

    the ability to produce a good at a lower opportunity cost than another producer

  • cost–benefit analysis

    a study that compares the costs and benefits to society of providing a public good

  • cyclical unemployment

    the deviation of unemployment from its natural rate

  • efficiency

    the property of society getting the most it can from its scarce resources

  • equality

    the property of distributing economic prosperity uniformly among the members of society

  • free rider

    a person who receives the benefit of a good but avoids paying for it

  • indifference curve

    a curve that shows consumption bundles that give the consumer the same level of satisfaction

  • inflation

    an increase in the overall level of prices in the economy

  • law of supply

    the claim that, other things being equal, the quantity supplied of a good rises when the price of the good rises

  • marginal rate of substitution

    the rate at which a consumer is willing to trade one good for another

  • natural monopoly

    a monopoly that arises because a single firm can supply a good or service to an entire market at a smaller cost than could two or more firms

  • price floor

    a legal minimum on the price at which a good can be sold

  • reserves

    deposits that banks have received but have not loaned out

  • shoe-leather cost

    the resources wasted when inflation encourages people to reduce their money holdings

  • stagflation

    a period of falling output and rising prices

  • strike

    the organized withdrawal of labor from a firm by a union

  • surplus

    a situation in which quantity supplied is greater than quantity demanded

  • trade deficit

    an excess of imports over exports

  • utility

    a measure of happiness or satisfaction

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