Bhh

Inflation:for each scenario specifying whether each group is hurt(A)or helped (B) by inflation People living in a fixed income Me.Ziegler buys a new Porscheon a 5 year fixed interest rate from the dealer Grandmother that lives in a monthly social security check Employees without a COLA clause in their contract

A B A A

Deflation

A decline in general price level

Hyperinflation

A period of rapid inflation that leaves a country'smoney Virtually worthless

Utility

Ability of a good or service to be useful and give satisfaction

Collusion

Agreements, usually illegally among producers to fix prices

Advertising Techniques (pick 2)

Bandwagon - following the "in" crowd Doom saying- "If you don't..."

which of the follwing most accurately represents the components that can be added up to find GDP?

C+I+G+(X-M)

Scarcity

Conditions that arises because society dose not have enough resources to produce all the things people would like to have

The discount rate is increased

Decrase

The Government Raises Taxes

Decrease

GNP

Dollar amount of all final goods and services produced within a nation including those abroad

Externality

Economic side effect that affect a 3rd party

Binder paper (supply)

Elastic

Diapers (demand)

Elastic

Porsche(demand)

Elastic

Depreciation on machinery

Fixed

Interest paid on a loan

Fixed

Rent payment

Fixed

Demand curve

Graph that shows the quantity demanded at all possible prices at a given time

Stageflation

High inflation and high unemployment occurring simultaneously in an economy

The FED buys bonds from banks

Increase

The government increasing spending

Increase

The required reserve ratio is decreased

Increase

Diapers(demand)

Inelastic

Oranges(supply)

Inelastic

Wine(supply)

Inelastic

Demand schedule

Listing that shows the quantity demanded at all possible prices at a given time

Circular Flow 1. Name the 2 markets that exist in the circular flow 2. Name and describe 2 things that flow from households to business 3. Name and describe 2 things that flow from business to households 4. Name and describe 2 things that flow from the households to governments

Resource Market ● Product Market ● Resources - land, labor, capital, and entrepreneurship ● Revenue - buying goods and services Money income - wages, rents Provide Goods and Services ● Taxes ● Labor

Inflation

Rise in the general level of prices

Name and describe two of the Principles of Economics

Scarcity forces tradeoffs : reminds us that limited resources force people to make choices and face tradeoffs when they choose ● Costs versus Benefits : tells us that people choose something when the benefits of doing so are greater than the costs

Surplus

Situation where quantity supplied is greater then quantity demand at a given price

Peak

The highest point between the end of an ecomnic expansion and the start of a contraction in a business cycle

Consumer price index

Used to measure price changes for a market basket of frequently used consumer goods

Labor

Variable

which of the following will not cause the demand curve shift?

a change in production costs

lying outside of the production possibility frontier represents which of the folowing

an unattainable combination of two goods

which of the following is an example of marginal thinking

comparing the difference in benefits of two alternatives

monetary policy is controlled by

congress

when measuring the unemployment rate part-time workers who are actively searching for a full time job are:

considered employed

fiscal policy includes all of the following except

controlling the discount rate

which form of business organization rests on a legal charter and establishes the business as an entity separate from the owners Sole Proprietorship industry partnership corporation

corporation

whcih of the following is a fixed cost for a manufacturer of blue jeans denim. labor, depreciation("wear"and "tear" on machines), electricity for running sewing machines

depreciation("wear"and "tear" on machines)

during a reccssion the economy is most likely to benefit from

expansionary monetary policy

economics is the study of which of the following

how to satisfy human wants with limited resources

all of the following are determinants of supply except resource prices, income, costs of production technology

income

An Oligopoly

inolves substantial barriers to entry and market power

The US is best describe as being a command economy traditional economy market economy mixed economy

mixed economy

If supply increases and demand decrases, which of the following will occur with certainty as the market reaches its new equlilbrium

price will decrease

which of the following is most important in determining what gets produced in a market economy? centrally planning, efficiency, comparative advantage, profit motive

profit motive

fiscal policy is carried out by changing any of the following except

reserve requirments

the cost of a decision made in the past is a

sunk cost

which of the following constitutes expansionary monetary policy

the FED lowers the discount rates

the law of diminishing returns states that as

the amount of one input is increased and all other inputs are held fixed,the marginal product of varied input will eventually decrease

good Y is a substitute for good x if

the demand for y increases when the price of x increase

The law of supply indicates that as prices increase the quanitiy of supplied increase the quantity of supplied decrase surplus increase shortage increase

the quantity of supplied increase

Trough

the stage of the economy's business cycle that marks the end of a period of decline business activity and the transition to expansion

opportunity cost is

the value of the best alternative to what actaully takes place

Factors of Production

● Land ● Labor ● Capital ● Entrepreneurship

Name and describe 2 market structures and provide an example:

● Monopoly: single producer and seller and extreme barriers, ex. Local power company PG&E ● Oligopoly: Some companies control majority of market, some barriers to entry, lots of advertisement, ex. Soft soda industry ● Monopolistic Competition: many sellers, relatively free entry, ex. Jeans

Define Globalization

● The process by which people around the world, along with their economic activities, are becoming increasingly interconnected ● Pro: can help aid developing countries out of poverty by improving the economy ● Con: trade agreements have been written to serve the interests of wealthy countries