FARE 1040 Study Guide - Final Guide: Government Failure, Public Choice, Jim Crow Laws
Document Summary
Arbitrage - simultaneous purchase and sale of an asset in order to profit from a difference in the price. Exploits different prices for same commodity or security in different markets or institutions. Change in quantity demanded - movement along demand curve. Change in quantity supplied - movement along supply curve. Comparative advantage - ability to produce a product or service at a lower opportunity cost than a competitor. Consumers surplus - difference between what consumers are willing and able to pay for a good/service and the total amount they actually do pay example. Demand function - (curve?, if it"s the same thing) an illustration of the inverse relationship between the price of a good and the quantity demanded, holding other variables constant. Within a given demand curve, a change in the price of good x leads only to a change in the quantity demanded of good x.