ECON 202Midterm 1

Ceteris Paribus

"holding other things constant

British GDP per capita was $21,046 in the year 2000 and $21,567 in 2001. What is the growth rate?

2.5%

Specialization

Division of labor

T/F Disposable income is a better measure of well-being than per capita GDP because its counts goods and services that we do not buy such s healthcare and education if they are provided by a government

False

T/F Capitalism is democracy

False, capitalism coexists with many political systems

GDP per capita

GDP/population, measures average living standard

Disposable income

Income remaining for a person to spend or save after all taxes have been paid without going into debt

GDP

Market value of all goods produced in a country, total income earned within a country

What is ignored by economists

Women's domestic and reproductive labor not factored into economic models

Which of the following variables have NOT followed the so-called "hockey-stick" trajectory - that is little to no growth for most of history followed by a sudden and sharp change to a positive growth rate?

a.) GDP per capita b.) labor productivity c.) inequality d.) atmospheric CO2

Growth Rate

change in GDP/ original level of GDP

Adam Smith

considered the father of economics, popularized view that individual self-interest can serve the public good

Why did the Industrial Revolution first occur in Britain about 1800?

high wages and cheap coal

In a capitalist system:

most production takes place in firms, inputs and outputs are private property

Was Malthus correct in concluding that population growth will outstrip food production growth?

no, technological and institutional innovations have permitted food supplies to more than keep pace with population growth

Since the Industrial Revolution we have witnessed a ___________.

permanent technological revolution

Capitalism includes

private property, markets, firms

What is the most important factor that explains differences in living standards across countries?

productivity

Invisible hand

unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically