ECO Final

main goals of modern society

economic growth, full employment, price stability, economic freedom, equitable distribution of income, economic security, balance trade and balance of exports

mutually agreeable

economic transactions willingly undertaken by both the buyer and the seller because each feels that the transaction will make him or her better off.

private property

enables individuals and businesses to obtain, use, and dispose of property resources as they see fit

True or false: money must be issued by a government for people to accept it.

false

what its product efficiency?

how fast producers can produce a product

all market structures are __________________ accept for pure competition

imperfect

all demand curves slope down because

incomes can decline quickly and significantly

non-exhaustive gov purchases

indirectly buying resources for people/firms

a change in the quantity demanded of skis is a movement along the demand curve for skis. In contrast, a change in demand for skis

is a movement along the demand curve for ski boots

what are the limited economic resources?

land, capital, labor, entrepreneurship

marginal analysis

making choices based on comparing marginal benefits with marginal costs

a situation known as inefficient distribution of goods and services in the free market is:

market failure

real GDP

measure of the value of economic output adjusted for price changes

income elasticity of demand

measures the responsiveness in the quantity demanded for a good or service when the real income of the consumers is changed (keeping all other variables constant)

cross elasticity of demand

measures the responsiveness in the quantity demanded of one good when the price of other goods changes

price elasticity of demand

measures the responsiveness of quantity demanded to a change in price

price elasticity of supply

measures the responsiveness of quantity supplied to a change in price

price-elasticity of supply

measures the responsiveness of quantity supplied to a change in price

nominal GDP

measures value of all finished goods produced by a country at current market price

if resources are used more efficiency in the production of electricity

more electricity can be produced for the same cost

if the price of a product decreases, this causes

movement down along the demand curve

dependent variable

the outcome factor; the variable that may change in response to manipulations of the independent variable.

what its savings?

the part of disposable income that is not spent on consent expenditure or consumption

utility

the pleasure, happiness, or satisfaction obtained from consuming a good or service

entrepreneur

A person who organizes, manages, and takes on the risks of a business.

freedom of enterprise

ensures that entrepreneurs and private businesses are free to obtain and use economic resources to produce their choice of goods and services and to sell them

balance of trade and balance of payments

exports should be equal to imports

progressive tax

avg rate increases with income

Erin grows became. The number of bushels (B) that she con produce depends on the number of inches of rainfall (r) that her orchards get.. The relationship is given algebraically as follows: B=3000 + 800R match each part of this equation with theo correct term.

3000 = vertical intercept R = Independent variable 800 = slope B= Dependent variable

Suppose you are given a $100 budget at work that can be spent only on two items: staplers and pens. If staplers cost $10 each and pens cost $2.50 each then the opportunity cost of purchasing one stapler is:

4 pens

if the population double in size, what can be expected to happen to the market for automobiles?

??

according to the law of demand, in order for consumers wants to be counted as part of the demand for a particular good

consumers must not only want to purchase a good, they must be able to purchase the good

exhaustive gov purchase

directly goods/services

competition

The presence in a market of independent buyers and sellers who compete with one another and who are free to enter and exit the market as they each see fit.

slope of a straight line

The ratio of the vertical change to the horizontal change between any two points of the line.

self-interest

each economic unit tries to achieve its own particular goal, which usually requires delivering something of value to others

imperfect competition

a competitive market with multiple sellers all of which sell non-identical goods/services

if the maximum price a customer is willing today is $100and the actual cost is $45 what is the outcome?

a consumer surplus of $55

variable cost

a cost that increases when the firm increases its output and decreases when the firm reduces its output

which of the following would not shift the demand curve for golf balls?

a decrease in the price of golf balls

a table or list of the prices and the corresponding quantities demanded of a particular good is called

a demand schedule

long run

a period of tie long enough to enable producers of a product to change the quantities of all resources they employ ( all resources they employ)

short run

a period of time in which producers are able to change the quantities of some but not all of the resources they employ

define inflation

a persistent increase in the overall price-level in an economy

economists use the term supply to refer to

a set of price and quantity-supplied combinations, everything else held constant

what is economics?

a social science concerned with making optimal choices under conditions of scarcity

capital

all manufactured aids used in producing consumer goods and services

land

all of the "free gifts" of nature used in the productive process

freedom of choice

allows business to employer dispose of their property and money as they see fit

market

an institution that brings buyers and sellers together.

fixed cost

any cost that in total does not change when the firm changes its output

the law of demand illustrates that

as price decreases, quantity demanded increases

regressive tax

avg rate decreases as income increases

proportional tax

avg rate stays constant as income increases or decreases

who does investment in the economy?

business firms

according to economic theory, a change in the quantity demanded of any good is always caused by

changes in consumers preferences for that good

economic freedom

choose your profession, jobs, and consumption

what is total surplus?

consumer surplus + producer surplus

oppurtunity cost

the next best thing that must be forgone in order to produce one or more unit in a given product

labor

physical actions and mental activities that people contribute to the production of goods and services

a change in the quantity supplied along the supply curve of Braun coffee makers is, everything else held constant,

positively and directly related to the price of a Braun coffee maker

economic growth

production of more and more goods and services overtime

what are the tax types?

progressie, regressie, proportional

full employment

providing jobs to citizens who are willing and able to work

economic investments

purchases of new capital goods

what are the 4 market models?

pure, oligopoly, monopoly, pure monopoly

business cycle

recurring increases and decreases in the level of economic activity over periods of years

demand shock

sudden change in demand for goods

if everyone expects the price of almonds to rise in the near future what will happen to the market for almonds?

the amount bought and sold today will increase.

the quantity supplied is

the amount sellers are willing and able to offer at a given price

public choice

the economic analysis of gov decision making, politics, and elections

freedom of enterprise

the freedom of firms to obtain economic resources, decide what products to produce with those resources, and sell those products in markets of their choice.

freedom of choice

the freedom of resource owners to dispose of their resources as they think best; of workers to enter any line of work for which they are qualified; and of consumers to spend their incomes in whatever way they feel is most appropriate.

economic security

the idea that the less fortunate members of society should get the economic support they need to live a decent life

define unemployment

the inability of a person who is willing, able, and actively looking for a job, to find a suitable job

What is scarcity?

the limited nature of society's resources

it is sometimes said that Ralph Lauren Polo shirts are outrageously expensive and that consumers are all being ripped off by the suppliers of these shirts. Which of the following statements might an economist put forth in reaction to statements such as this?

the price of any good is determined by supply AND demand.

the quantity supplied of bicycle parts is a function of

the price of bicycle parts

in order to construct a demand curve for good A, which of the following does not need to be held constant

the price of substitute goods

demand for a good is a measure of the relationship between

the price of that good and the quantity demanded of that same good when the determinants of demand do not change

financial investment

the purchase of assets like stocks, bonds, and real estate in hope of reaping a financial gain

according to the law if demand, if the price of compact disks decreased, ceteris paribus

the quantity demanded of compact disks would increase

according to the law of supply, if the price of electric ranges increased, everything else held constant

the quantity supplied of electric ranges would increase

private property

the right of private persons and firms to obtain, control, employ, dispose of, and bequeath land, capital, and other property.

independent variable

the variable that changes first

break-even point

total cost= total revenue

equitable distribution of income

try to minimize gap between rich and poor

inverse relationship

two variables change in opposite directions

direct relationship

two variables change in the same direction

supply shock

unexpected events that affect the supply of a product

allocative efficiency

using resources in a way that satisfies both consumers and producers

self-interest

what each individual or firm believes is best for itself and seeks to obtain.

the law of supply illustrates that

whatever affects price affects quantity supplied

what is an externality?

when a benefit or cost of a market transaction falls on a third-party

positive externality

when a benefit spills over to a third-party

what is a efficiency loss? ( dead weight loss )

when a company can't get product out in time

infinite elasticity

when quantity demanded or quantity supplied changes by an infinite amount in response to any change in price at all

government purchases

when resources are apart of domestic output

what is a shock?

when the future expectation does not come true

negative externality

when the production/consumption of a product results in a cost to a third-party