No Free Lunch: Economics for a Fallen World: Third Edition, Revised

Appendix A Definition Index 487 Q Quantity demanded: At every price, the demand curve identifies a specific quantity that consumers are willing to purchase. Movement along a demand curve is said to change the quantity demanded, while a shift of the demand curve is a change in demand. (Chapter 3—A Deeper Dive into Concepts for Demand) Quantity supplied: determined by the price of a good or service. According to the law of supply, there is a positive relationship between the price of a good or service and its quantity supplied. (Chapter 4—Supply and Costs/Individual vs. Market Supply) R Ration: the allocation of scarce goods to competing ends. (Chapter 2—How Markets Allocate Scarce Resources) Rational ignorance: Voters are said to be rationally ignorant when the costs of being educated on an issue exceed the benefits. Since the ability to influence a political outcome is very small for most Americans (the benefit of being politically informed), it is rational for them not to expend resources (costs) to become an informed voter. (Chapter 14—Buy My Vote Please) Regulatory capture: This occurs when regulators support the needs of the industry they regulate rather than the needs of the general public. (Chapter 14—Real World Regulators) Regulatory costs: the sum of the compliance costs and the implementation costs associated with any regulation. (Chapter 14—Size of Government) Relative price: the price of one good or service in terms of another. (Chapter 3—A Deeper Dive into Concepts for Demand) Reserve requirements: the amount of reserves a bank is required to have by regulation to meet cash withdrawal requirements of its customers. (Chapter 12— Federal Reserve Tools) Returns to scale: refers to how much output increases with a given increase in productive inputs. Returns to scale focuses on how much more efficient a firm can become in production as it grows larger. (Chapter 7—Structure of Production: Stages of Capital/Returns to Scale) Risk: a future event that can be assigned a probability of occurrence. Risky events can be prepared for, or “hedged.” (Chapter 10—The Market Process/Uncertainty)