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