Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

HSMGMT 514 > Midterm > Flashcards

Midterm Flashcards

0
Q

Behavioral econ

A

study effects of social, cognitive, emotional factors on econ decisions of indivs and institutions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
1
Q

Intermediate good

A

Not final outcome - ie healthcare is intermediate to final outcome of health

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Basic Assumptions of Econ

A

Scarcity
Taste for diversity
Substitution
More preferred to less (almost always)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Value determined by….

P based on….

A

preferences and constraints of buyer, NOT what it took to produce it
P based on MV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Demand schedule

D determined by….

A

Schedule of one’s willingness to pay for econ goods and services
Determined by MV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Law of Diminishing MV

A

MV decreases as consumption of goods increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

On demand schedule, how to find MV

A

MV is the vertical distance between the x-axis and Qd

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Demand is a function of (influenced by)…

A 
Income
Tastes & preferences
Prices of substitutes and complementary goods
Time
Quality
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Quantity demanded influenced by…

A

Price ONLY

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Demand/Supply is the….

A

Willingness to buy/sell

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Does supply-side economics work?

A

NO

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Supply is a function of (influenced by)

A

Tech
Changes in price of inputs
Changes in price of other goods - substitutes, complements

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Equilibrium

3 formulas

A

when willingness to sell = willingness to pay
MV=MC
WTS=WTP
S=D

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Price ceiling creates…

Price floor creates…

A

Ceiling: shortage
Floor: surplus

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Price elasticity of demand definition

A

How people respond to a change in price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Endogeniety

Exogeniety

A

Endo: Force within model
Exo: Force outside model

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Substitution effect

Income effect

A

Subst: pick less expensive alternative
Income: Decrease in amt of $ to buy other things

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Price Elasticity of Demand Formula

A

% change Qd / % change P

= [(Qnew - Qold)/Qold] / [(Pnew-Pold)/Pold]

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Scale of Elasticity (1, 0, etc)

A

closer to 0 = less elastic
closer to 1 = more elastic
0 = inelastic

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Elasticity depends on…

2 things

A

More responsiveness to price when have less of item

Elasticity depends on where you are on demand curve (more steep curve, less elastic)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

What effects elasticity?

A

^Substitutes = ^
^Time = ^
^Budget Impact =^ (I don’t understand this)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Fair insurance premium formula

A

The probability of a bad thing happening x size of potential loss

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Risk neutral (def + curve)

A

Willing to accept fair bet without any incentive

Linear, upward-moving curve

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Risk Averse (definition, curve)

A

Would take this amount with certainty, voluntarily gives up higher amount for a decrease in risk
Curve is parabolic (? - curved) in increasing direction

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Certainty Equivalent

A

Point on risk averse curve equal to the bet amount

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Non-pecuniary resources

A

Compensation in non-cash form, eg employer-provided healthcare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Factor of Production (FOP)

A 
Any input to productive process
eg capital (K) or labor (L)
27
Q

Production Function

A

Method of organizing FOPs to produce output

28
Q

Short run

Long run

A

Short: period during which at least one FOP = fixed
Long: period for which no FOP is fixed (also said in class: at least 1 = variable)

29
Q

Goal of decision maker is to…

Formulas

A

Goal: Maximize profit
Formulas: Profit = TR-TC = (P*Q) - [cost(Q)]

30
Q

Fixed costs: sunk and recoverable

A

Sunk: Cannot recover
Recoverable: Can recover some or all

31
Q

Productivity can only be assigned to…

A

A variable factor

32
Q

Average Product =

A

Total Prod. Output / Amt of Var. Factor

33
Q

MP =

A

Change in TP or output / Change in Variable factor

34
Q

TC =

A

FC+VC

35
Q

AFC =

A

FC/Output

36
Q

AVC =

A

VC/Output

37
Q

ATC =

A

TC/Output

38
Q

MC =

A

Change in TC / Change in Output

39
Q

Diminishing Marginal Rate of returns

A

Expectation that returns to a fixed factor will decrease as more of a variable input added to productive process

40
Q

Economies of Scale

A

Productivity and cost implications of increasing productive capacity (can be more, less or the same)

41
Q

Economies of Scope

A

Productivity and cost implications of increased produtive capacity (can be increased, decreased, equal)

42
Q

In order for the average relationship to change, what does marginal relationship do?

A

Marginal relationship pulls average relationship after it

43
Q

AP =

A

MP

44
Q

ATC =

A

(TC/Q)

= (VC/Q) + (FC/Q)

45
Q

MC =

A

change in TC / change in Q =

(change in FC + change in VC) / change in Q

46
Q

Incremental costs driven exclusively by….

A

variable costs

47
Q

ATC + AV cost curves are minimized where….

A

Cost curves minimized when MC curve crosses them

48
Q

Price takers:

TR=

A

TR = P (set) * Q (you choose) = (P*Q)/Q = P

49
Q

Price takers:

MR =

A

MR = change in TR / change in Q = P = AR

50
Q

Decision rule for profit maximization: occurs when…

A

Occurs when firm chooses Q so that MR = MC (incremental reward = incremental cost)

51
Q

Willing to bring goods to market if….

A

Compensated for at least the cost of doing so

52
Q

TC =

A

AC*Q

53
Q

ATC =

A

TC/Q

54
Q

TC =

A

ATC * Q

55
Q

What influences market structure

A

Price of substitutes
Barriers to entry
Info available

56
Q

Profit = (formula)

A

TR - TC

= (P*Q-TC)

57
Q

Profit max (formula)

A

MR = MC

58
Q

TR =

A

P*Q

59
Q

AR =

A

TR/Q = P

= change in revenue / change in Q

60
Q

Under what circumstances might behavior change be better achieved through impacting demand versus quantity demanded

A

When demand = inelastic, price = little fx on Qd, greater fx on behavior

61
Q

Fair insurance

A

When premium is equal to expected value of loss or adverse event should it occur

62
Q

Fixed cost def

A

Does not vary with output

63
Q

How to calculate relative change in price

A

% change price = (new P - old P) / old P

64
Q

Expected wealth formula

A

Weighted average of potential outcomes

.2amt + .8amt

65
Q

Maximize utility or wealth?

A

UTILITY

66
Q

Risk premium on Wealth/Utility graph

A

EW-W”

Expected wealth minus wealth with certainty instead of facing the risk of the loss

HSMGMT 514 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions