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Hannah Brotherton > Blackstock test 1 microeconomics 202 > Flashcards

Blackstock test 1 microeconomics 202 Flashcards

1
Q

define economics

A

the study of how a society uses its scarce resources to supply the insatiable wants and needs of said society both now and in the future

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2
Q

the study of how a society uses its scarce resources to supply the insatiable wants and needs of said society both now and in the future

A

economics

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3
Q

define need

A

something that must have, or you will die

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4
Q

something that must have, or you will die

A

need

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5
Q

define want

A

something that will make life better, but you won’t die if you don’t have it

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6
Q

something that will make life better, but you won’t die if you don’t have it

A

want

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7
Q

define a good

A

any tangible item which satisfies the criteria of a want or need

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8
Q

any tangible item which satisfies the criteria of a want or need

A

good

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9
Q

define a service

A

any intangible, but useful activity which meets the criteria of a want or need

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10
Q

any intangible, but useful activity which meets the criteria of a want or need

A

service

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11
Q

what do economists do?

A

in a broad sense, they study human action

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12
Q

in a broad sense, they study human action

A

what economists do

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13
Q

define praxeology (Greek word)

A

study of human action

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14
Q

study of human action

A

praxeology (Greek word)

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15
Q

areas of economics

A

-marketing
-accounting
-management
-finance

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16
Q

-marketing
-accounting
-management
-finance

A

areas of economics

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17
Q

what are Econ majors taught?

A

they’re taught to be real-life problem solvers through the scientific method

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18
Q

they’re taught to be real-life problem solvers through the scientific method

A

Econ majors

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19
Q

Incentives matter because…

A

they can come in the form of a rewards or a threat of violence

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20
Q

they can come in the form of a rewards or a threat of violence

A

incentives

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21
Q

positive analysis

A

claims that attempt to describe the world as it is

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22
Q

claims that attempt to describe the world as it is

A

positive analysis

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23
Q

normative analysis

A

claims that attempt to describe the world as it should be, or as people believe it so to bo (without supporting evidence)

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24
Q

claims that attempt to describe the world as it should be, or as people believe it so to bo (without supporting evidence)

A

normative analysis

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25
Q

define ceteris paribus (Latin word)

A

all other things held equal

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26
Q

all other things held equal

A

ceteris paribus (Latin word)

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27
Q

define market

A

the coming together of buyers and sellers whose joint decisions determine the price

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28
Q

the coming together of buyers and sellers whose joint decisions determine the price

A

market

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29
Q

what are the factors of production

A

-land
-labor
-capital
-technology
(TLLC)

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30
Q

-land
-labor
-capital
-technology
(TLLC)

A

factors of production

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31
Q

define consumer goods

A

the things we, as consumers, buy and bring home

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32
Q

the things we, as consumers, buy and bring home

A

consumer goods

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33
Q

define capital goods

A

tools and machines used to make consumer goods

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34
Q

tools and machines used to make consumer goods

A

capital goods

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35
Q

what is cartesian graphing?

A

a system that tells you your exact position on a graph (the graphs we’ve been doing since middle school)

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36
Q

a system that tells you your exact position on a graph (the graphs we’ve been doing since middle school)

A

cartesian graphing

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37
Q

who is Renee Decart?

A

a French mathematician who invented cartesian graphing

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38
Q

a French mathematician who invented cartesian graphing

A

Renee Decart

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39
Q

Production possibilities frontier

A

a graph which shows the combinations of output that the economy can possibly produce given the available land, labor, capital, and technology (the normal graphs we’ve been doing in class)

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40
Q

a graph which shows the combinations of output that the economy can possibly produce given the available land, labor, capital, and technology (the normal graphs we’ve been doing in class)

A

production possibilites frontier

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41
Q

define opportunity cost

A

what you give up when you make a choice

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42
Q

what you give up when you make a choice

A

opportunity cost

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43
Q

opportunity cost formula

A

explicit costs + implicit costs

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44
Q

explicit costs + implicit costs

A

opportunity cost formula

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45
Q

define explicit costs

A

actual out-of-pocket expenses

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46
Q

actual out-of-pocket expenses

A

explicit costs

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47
Q

define implicit costs

A

costs that do not include contractual payments

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48
Q

costs that do not include contractual payments

A

implicit costs

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49
Q

define absolute advantage

A

when one country can produce more than another country in absolute terms

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50
Q

when one country can produce more than another country in absolute terms

A

absolute advantage

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51
Q

define autarky

A

no trade (you only have what you made for yourself)

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52
Q

no trade (you only have what you made for yourself)

A

autarky

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53
Q

opportunity cost formula

A

what you must give up / what you want

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54
Q

what you must give up / what you want

A

Opportunity cost formula

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55
Q

define comparative advantage

A

the ability to produce at a lower opportunity cost then a competitor

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56
Q

the ability to produce at a lower opportunity cost then a competitor

A

comparative advantage

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57
Q

what are the 2 ways a country can move beyond its PPF?

A

-technological advances
-trade

58
Q

-technological advances
-trade

A

2 ways a country can move beyond its PPF

59
Q

trade will make both countries better. TF?

A

true

60
Q

trade will make both countries worse. TF?

A

false

61
Q

what’s the difference between a formula and an equation?

A

formula is the general guide, and equation is the formula with correctly plugged in numbers

61
Q

define quantity demanded

A

the amount of a good or service which will be purchased at a specific price

62
Q

the amount of a good or service which will be purchased at a specific price

A

quantity demanded

63
Q

define demand

A

the amount of a good or service which will be purchased at any given price

64
Q

the amount of a good or service which will be purchased at any given price

A

demand

65
Q

define law of demand

A

as price rises, quantity demanded falls and as price falls, quantity demanded rises, ceteris paribus

66
Q

as price rises, quantity demanded falls and as price falls, quantity demanded rises, ceteris paribus

A

law of demand

67
Q

the change in price is the cause, the change in quantity is the effect. TF

A

true

68
Q

the change in quantity is the cause, the change in price is the effect. TF

A

false

69
Q

what direction is demand’s slope?

A

downward

70
Q

what direction is supply’s slope?

A

upward

71
Q

an increase in supply or demand is a shift…

A

to the right

72
Q

a decrease in supply or demand is a shift…

A

to the left

73
Q

5 common reasons demand will change

A

-change in tastes or preferences
-change in expectations
-change in laws
-change in income
-change in the price of other goods
(top lie pog)

74
Q

-change in tastes or preferences
-change in expectations
-change in laws
-change in income
-change in the price of other goods
(top lie pog)

A

5 common reasons demand will change

75
Q

when income rises, demand for ____ ____ will also rise and vice versa

A

normal goods

76
Q

what income falls, demand for ____ ____ will also rise and vice versa

A

inferior goods

77
Q

define substitutes

A

goods that are purchased instead of another good

78
Q

goods that are purchased instead of another good

A

substitutes

79
Q

define complements

A

two goods that are purchased together; when the price of GOOD A rises, demand for GOOD B falls and vice versa

80
Q

two goods that are purchased together; when the price of GOOD A rises, demand for GOOD B falls and vice versa

A

complements

81
Q

normal substitutes

A

close enough (Papa John’s and Johnny’s)

82
Q

perfect substitutes

A

consumers can’t tell the difference (which electrical company you use)

83
Q

imperfect substitutes

A

goods which satisfy an end goal, but have vastly different marginal rules (traveling by plane or car)

84
Q

define the law of supply

A

when price rises, quantity supplied also rises, and vice versa (ceteris paribus)

85
Q

when price rises, quantity supplied also rises, and vice versa (ceteris paribus)

A

law of supply

86
Q

define quantity supplied

A

the amount of a good or service which will be produced at a specific price

87
Q

the amount of a good or service which will be produced at a specific price

A

quantity supplied

88
Q

define supply

A

the amount of a good or service which will be produced at any price

89
Q

the amount of a good or service which will be produced at any price

A

supply

90
Q

4 common reasons supply will change

A

-change in input prices
-change in technology
-change in expectations
-change in the number of sellers
(nose tip)

91
Q

-change in input prices
-change in technology
-change in expectations
-change in the number of sellers
(nose tip)

A

4 common reasons supply will change

92
Q

define shortage

A

when quantity demanded is greater then quantity supplied at a specific price

93
Q

when quantity demanded is greater then quantity supplied at a specific price

A

shortage

94
Q

define equilibrium

A

when quantity demanded equals quantity supplied and there are no unintended shortages or surpluses

95
Q

when quantity demanded equals quantity supplied and there are no unintended shortages or surpluses

A

Equilibrium

96
Q

define surpluses

A

when quantity supplied is greater than quantity demanded at a certain price

97
Q

when quantity supplied is greater than quantity demanded at a certain price

A

surpluses

98
Q

define elasticity

A

a measure of the responsiveness of an economic agent to a change in a variable

99
Q

a measure of the responsiveness of an economic agent to a change in a variable

A

elasticity

100
Q

elasticity demand formula

A

% change in quantity demanded / % change in price

101
Q

% change in quantity demanded / % change in price

A

elasticity demand formula

102
Q

rules of elasticity

A

if absolute value of answer is…
-greater than 1, elastic
-equal to 1, unitary elastic
-less than 1, inelastic

103
Q

define inelastic

A

consumers are fairly responsive to a change in price

104
Q

consumers are fairly responsive to a change in price

A

inelastic

105
Q

define elastic

A

consumers are fairly unresponsive to a change in price

106
Q

consumers are fairly unresponsive to a change in price

A

elastic

107
Q

define price elasticity of demand

A

a measure of the responsiveness of a consumer to a change in price

108
Q

a measure of the responsiveness of a consumer to a change in price

A

define price elasticity of demand

109
Q

elements which help determine elasticity

A

-availability of close substitutes
-necessities vs. luxuries
-definition of market
-time horizon

110
Q

what groups are most interested in elasticities?

A

-sellers
-government

111
Q

midpoint method formula

A

(P2-P1)/[(P2+P1)/2]

112
Q

(P2-P1)/[(P2+P1)/2]

A

midpoint method formula

113
Q

define cross-price elasticity of demand

A

a measure of the responsiveness of consumers to a change in the price of another good

114
Q

a measure of the responsiveness of consumers to a change in the price of another good

A

cross-price elasticity of demand

115
Q

how do you know if it’s a substitute or a complement?

A

if your answer, before taking absolute value is positive, it’s a substitute; if it’s negative, it’s a complement

116
Q

define income elasticity of demand

A

a measure of the responsiveness of consumers to a change in income

117
Q

a measure of the responsiveness of consumers to a change in income

A

income elasticity of demand

118
Q

how do you know if it’s an inferior or normal good?

A

if the answer is positive, it’s normal; if it’s negative, it’s inferior

119
Q

the person who most highly values the good receives it. TF

A

T (this is a good economic phrase)

120
Q

the person who most highly values the good does not receive it. TF

A

F

121
Q

define price ceiling

A

the maximum, legal price which can be charged for a good or service

122
Q

the maximum, legal price which can be charged for a good or service

A

price ceiling

123
Q

3 facts about price ceiling

A
  • an effective price ceiling always lies below equilibrium
  • an effective price ceiling always causes a shortage
  • an effective price ceiling always hurts the community in the long run
124
Q

3 facts about price floor

A
  • an effective price floor always lies above equilibrium
  • an effective price floor always causes a surplus
  • an effective price floor always hurts the community in the long run
125
Q

define price floor

A

a minimum legal price which can be charged for a good or service

126
Q

a minimum legal price which can be charged for a good or service

A

price floor

127
Q

elasticity demand formula (normal method)

A

(P2-P1) / P1

128
Q

(P2-P1) / P1

A

elasticity demand formula (normal method)

129
Q

define excise tax

A

a tax charged on goods produced within a country (effects producer)

130
Q

a tax charged on goods produced within a country (effects producer)

A

excise tax

131
Q

if the demand curve is more inelastic than the supply curve…

A

then consumers will have to pay more tax

132
Q

if the demand curve is more elastic than the supply curve…

A

then producers will have to pay more tax

133
Q

define consumers’ surplus

A

the amount that consumers’ were willing to pay for a good or service but did not have to.

134
Q

the amount that consumers were willing to pay for a good or service but did not have to.

A

consumers surplus

135
Q

define producers’ surplus

A

the producers’ total revenue minus the producers’ opportunity cost

136
Q

walk through calculating supply and demand

A

1) demand and supply equations will be given
2) set them equal to 0 and solve to get demand and supply intercepts
3) set demand and supply equations equal to each other to get equilibrium price
4) plug in equilibrium price into demand and supply equations to get equilibrium quantity (the new numbers should be equal)
5) equilibrium quantity x .5 x the difference between demand intercept and equilibrium price (to find consumers’ surplus) OR equilibrium price and supply intercept (to find producer’s surplus)
6) equilibrium price x equilibrium quantity = total revenue
7) total revenue - producers’ surplus = producers opportunity cost

137
Q

define tariff

A

a tax placed on imported goods

138
Q

a tax placed on imported goods

A

tariff

139
Q

from 0 to QS is the amount our domestic ____ ____

A

producers produce

140
Q

from 0 to QD is the amount domestic ____ ____

A

consumers purchase

141
Q

what if there are leftovers of 0 to QS or 0 to QD ?

A

they are exported

Hannah Brotherton (18 decks)

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