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Spring of 2012 > Econ Main Points > Flashcards

Flashcards in Econ Main Points Deck (24)
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0
Q

Normative economics

A

Value judgement based on how economic life should or ought to be

1
Q

Economics

A

A behavioral science concerned with the way scarce resources are allocated to satisfy human wants

2
Q

Positive economics

A

Observation or explanation of economic life as it is in fact

3
Q

Ceteris paribus

A

All other things held equal or constant

*useful as an analytical tool to focus on only the impacts of the variable of interest

4
Q

Real vs nominal

A

% vs numbers

5
Q

Margin

A

The difference between an existing situation and a proposed (usually small) change

6
Q

Marginal cost (MC)

A

The additional cost generated by producing one more unit of output

7
Q

Marginal revenue (MR)

A

The additional revenue that will be generated by selling one more unit of output

8
Q

Marginal product of labor (MPl)

A

The additional output generated by employing/using one more unit of labor

9
Q

Demand curve

A
Slope downward
Inverse relation
Y=mx+b
M-always negative (law of demand)
B- the lowest price where the Qd=0
10
Q

Competition

A

The effort of two of two or more parties acting independently to secure the business of a third party by offering the most favorable terms

11
Q

Market equilibrium

A

Consumer surplus and producer surplus
Supply and demand curves meet
Market clears where they meet

12
Q

Fundamental theorem of exchange

A

Gains thru trade

13
Q

A. Smith’s Invisible Hand

A

Each individual is motivated toward their own end while the wants of society, in general, are met

14
Q

Price ________ demanders, ________ suppliers

A

Rations, motivates

15
Q

Consumer surplus (CS)

A

The difference between what a consumer is willing and able to pay for a good or service and what they actually pay

16
Q

Producer surplus (PS)

A

The difference between what the producer is willing and able to receive for a good or service and what they actually receive

17
Q

Property rights

A

Rules that govern and establish ownership and control of resources in an economy

18
Q

Determinants in the validity of a property right

A

Definition
Enforcement
Transferability

19
Q

Prof mansfield: 3 ways a system of property rights evolve in an economy

A

Tradition
Command (control)
Market

20
Q

Price elasticity of demand (Ed)

A
  • Change Qd/Qd/change P/P
21
Q

Liquidity

A

The ease with which an asset may be converted into the economies medium of exchange, cet par

22
Q

Business cycle

A

The rise and fall of business activity relative to the long term trend line

23
Q

Competitive market characteristics

A
Many buyers and sellers
Perfect information
Homogenous products
Free entry and exit
Atomistic trade

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