midterm 1 Flashcards
What is GDP
the market value of all final goods and services produced in a country in a given year
What kind of flow is goods and services
income flow from firms to households
What is included in current measure of GDP
A professional gardener regularly cuts your lawn.
Model A is superior to model B if..
Its predictions are closer to facts than model b
If we compare Canadas GDP and Chinese GDP
Chinas real GDP per person is less than real GDP per person in Canada
Stock and bonds are not included in GDP because
they are not goods and services
Intermediate goods, used goods, and purchases of stocks and bonds
are not included in calculating GDP
Opportunity cost is
highest valued alternative we give up to get something
If Saskatchewan closes hospitals
The marginal benefit from one of these hospitals was less than marginal cost
If the economy capital increases over the year
net investment was positive
economic model is
useful if it predicts well, even if assumptions are not realistic
if you begin with 24 million of capital and end the year with 20 million of capital
depreciation exceeded gross investment by 4 million
Scarcity exists…
in all economics
The purchase of a new car by a household is an example of
consumption expenditure
Definition of economics
The study of how individuals, businesses, governments, and entire societies make choices as they cope with scarcity and incentives that influence and reconcile choices
