Chapter 1 Flashcards

1
Q

Outputs

A

Final goods and services that firms and industries sell to consumers.

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2
Q

Inputs

A

Resources or factors of production required to produce final outputs.

Land, Labor, Capital, Raw materials, Entrepreneurship

Inputs are directly related to demand

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3
Q

What are the 4 major types of markets

POMM

A
  1. Perfect Competition- Large, Undifferentiated, Easy Entry, Complete information.
  2. Oligopoly-
  3. Monopolistic Competition- Barriers to Entry
  4. Monopoly-
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4
Q

4 Characteristics that distinguish the 4 markets

A
  1. Number of Firms
  2. Differentiated or undifferentiated products sold?
  3. Difficulty of Entry
  4. Amount of Info available to market participants
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5
Q

Price Taker (characteristic of perfect competition)

A

Firm that doesn’t have to lower its price to sell more output.

Cannot influence the price of its product

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6
Q

Perfect competition firms have no

A

Market Power - Ability to influence price

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7
Q

The Monopoly Model firms produce products

A

having no close substitutes

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8
Q

Monopolistic Model have _____ products and ____ _____

A

Differentiated, market power

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9
Q

Oligopoly Model

A

Small number of large firms dominate market. Sensitive to competition. (interdependent)

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10
Q

5 Major Catagories of spending

CIGXM

A
  1. Consumption (C)
  2. Investment (I)
  3. Government (G)
  4. Export (X)
  5. Import (M)
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11
Q

GDP = _ + _ + _ + _ - _

A

C + I + G + X - M

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12
Q

Fiscal Policies

A

Implemented by national government and involve changing Taxes and Government Expenditure

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13
Q

Monetary Policies focus on changing

A

the money supply to influence interest rates, which affect

Real Consumption
Investment Spending
Resulting levels of input and output

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14
Q

Microeconomic influences on managers

A

How consumer behavior affects revenue

How Production technology and input prices affect costs

How market and regulatory environment influence ability to set prices and respond to competitor strategies.

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15
Q

3 Factors affecting Macro Spending Behavior

P, M, F

A
  1. Private sector changes in behavior
  2. Monetary or fiscal changes of policy
  3. Foreign sector changes
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16
Q

4 Spending and Revenue provisions of the ARRA

P, E, P, T

A
  1. Providing funds to state and local, aid for education and transportation
  2. Extending unemployment benefits
  3. Purchasing goods and services, construction and investment activities.
  4. Temporary tax relief for individuals and businesses