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Solutions for Chapter Module 3: The Production Possibilities Curve Model

Full solutions for Krugman's Economics for AP* | 2nd Edition

ISBN: 9781429218276

Solutions for Chapter Module 3: The Production Possibilities Curve Model

Since 5 problems in chapter Module 3: The Production Possibilities Curve Model have been answered, more than 13007 students have viewed full step-by-step solutions from this chapter. This expansive textbook survival guide covers the following chapters and their solutions. Chapter Module 3: The Production Possibilities Curve Model includes 5 full step-by-step solutions. Krugman's Economics for AP* was written by and is associated to the ISBN: 9781429218276. This textbook survival guide was created for the textbook: Krugman's Economics for AP*, edition: 2.

Key Business Terms and definitions covered in this textbook
  • capital fligh

    a large and sudden reduction in the demand for assets located in a country

  • club goods

    goods that are excludable but not rival in consumption

  • Condorcet paradox

    the failure of majority rule to produce transitive preferences for society

  • consumer surplus

    the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

  • dominant strategy

    a strategy that is best for a player in a game regardless of the strategies chosen by the other players

  • equality

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

  • federal funds rate

    the interest rate at which banks make overnight loans to one another

  • fixed costs

    costs that do not vary with the quantity of output produced

  • imports

    goods produced abroad and sold domestically

  • income elasticity of demand

    a measure of how much the quantity demanded of a good responds to a change in consumers’ income, computed as the percentage change in quantity demanded divided by the percentage change in income

  • inferior good

    a good for which, other things being equal, an increase in income leads to a decrease in demand

  • marginal change

    a small incremental adjustment to a plan of action

  • moral hazard

    the tendency of a person who is imperfectly monitored to engage in dishonest or otherwise undesirable behavior

  • negative income tax

    a tax system that collects revenue from high-income households and gives subsidies to lowincome households

  • permanent income

    a person’s normal income

  • price elasticity of supply

    a measure of how much the quantity supplied of a good responds to a change in the price of that good, computed as the percentage change in quantity supplied divided by the percentage change in price

  • public goods

    goods that are neither excludable nor rival in consumption

  • purchasing-power parity

    a theory of exchange rates whereby a unit of any given currency should be able to buy the same quantity of goods in all countries

  • reserve requirements

    regulations on the minimum amount of reserves that banks must hold against deposits

  • velocity of money

    the rate at which money changes hands

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