Formulas and def Flashcards
(70 cards)
1
Q
Types of resources
A
land, labour, capital
2
Q
3 problems of planned eco
A
information, incentive, chronic shortage
3
Q
market eco thinker
A
Smith
4
Q
positive statement
A
no value judgement
5
Q
normative statement
A
value judgement
6
Q
dependent variable
A
endogenous
7
Q
independent variable
A
exogenous
8
Q
3 different types of data
A
cross-sectional, time-series, panel
9
Q
slope of a straight line
A
ΔA/ΔB
10
Q
flow
A
over time
11
Q
stock
A
at a specific point in time
12
Q
augmentation in D
A
rightward shift of D curve
13
Q
decrease in D
A
leftward shift of D curve
14
Q
change in S/D
A
shift of the curve
15
Q
change in QS/QD
A
mouvement along the curve
16
Q
equilibrium
A
QS=QD
17
Q
elastic
A
> 1
18
Q
inelastic
A
< 1
19
Q
unit elastic
A
= 1
20
Q
P elasticity of D
A
%ΔQd/%ΔP
21
Q
vertical D curve
A
perfectly inelastic
22
Q
horizontal D curve
A
perfectly elastic
23
Q
P elasticity of S
A
%ΔQS/%ΔP
24
Q
income elasticity of D
A
%ΔQD/%Δ income
25
income elasticity for inferior good
elasticity < 0
26
income elasticity for normal good
elasticity > 0
27
income elasticity for necessities
positive but < 1
28
income elasticity for luxuries
positive but > 1
29
cross P elasticity of D
%ΔQDx/%ΔPy
30
cross elasticity of substitutes
> 0
31
cross elasticity of complements
< 0
32
binding price floor
above equilibrium
33
binding price ceiling
under equilibrium
34
losers and winners of rent controls
winners: exiting tenants
losers: landlords + potential future tenants
35
transitivity
x > y > z = x > z
36
different types of indifference curves
crossing, upward sloping, thick
37
marginal rate of substitution
the slope of the curve at a specific point
38
perfect substitutes
parallel straight curves
39
perfect complements
parallel 90° curves
40
imperfect substitutes ( normal goods)
non-straight curve
41
diminishing marginal utility
the more you have, the less marginal satisfaction you get
42
budget set
all affordable combinations of goods and services given a consumer's income and prices
43
budget line
graphical representation of budget set
44
utility maximizing condition
MU1/MU2 = P1/P2
or
MU1/P1 = MU2/P2
45
real income
income expressed in terms of the purchasing power of money income
46
substitution effect
change in the QD of a product resulting from a change in its relative P
47
income effect
change in QD resulting from a change in real income
48
giffen good
inferior good with a positively sloped D curve and a large income effect (large proportion of tot expenditure)
49
normal good (graph)
income and substitution effect in same direction
50
inferior good (graph)
income effect partially affects substitution effect
51
giffen good (graph)
income effect outweights the substitution effect
52
conspicuous good
snob appeal
53
consumer value
difference between the total value that consumers place on all units consumed of a product and the P they actually pay
54
production function
Q = f(L,K)
55
Accounting profits
Revenues - Explicit costs
56
Eco profits
Revenues - (Explicit + Implicit Costs)
57
law of diminishing returns
equal increase in work effort begins to add less and less to total output
58
ATC curve
U-shaped
59
cost minimization condition
MPk/MPl = Pk/Pl
or
MPk/Pk = MPl/Pl
60
LRAC
falling: decreasing costs, increasing returns
constant: eco of scales, min efficient scale, constant costs and returns
increase: increased costs, decreased returns
61
STRATC
tangent to LRAC at optimal level of output
62
perfectly competitive market
each firm has 0 market power
63
profits maximization
MR = MC
64
MR > MC
increase output
65
MR < MC
decrease output
66
condition to shut down
Revenue < AVC
67
LR industry equilibrium
when profits = 0 (break-even P)
68
industries with many small firms
perfectly competitive, monopolistic competition
69
industries with a few large firms
oligopoly
70
imperfect competition
firms differentiate their products, set prices, non-price competition
