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Economics 190 > Chapter 11-15 > Flashcards

Chapter 11-15 Flashcards

1
Q

perfect competition

A

a market in which there are many firms, each selling an identical product; many buyers; no barriers to the entry of of new firms into the industry; no advantage to established firms; and buyers and sellers are well informed

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2
Q

Monopoly

A

A market in which one firm sells a good or service that has no close substitues and a barrier blocks the entry of new firms

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3
Q

Monopolistic competition

A

a market in which a large number of firms compete by making similar but slightly different products

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4
Q

Oligopoly

A

A market in which a small number of interdependent firms compete

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5
Q

Price taker

A

a firm that cannot influence the price of the good or service that it produces

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6
Q

Marginal revenue

A

the change in total revenue that results from a one unit increase in the quantity sold

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7
Q

shutdown point

A

the point at which price equals minimum average variable cost and the quantity produced is that at which average variable cost is at its minimum

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8
Q

Regulation

A

rules administered by a government agency to influence prices, quntities, entry and other aspects of economic activity in a firm or industry

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9
Q

deregulation

A

the proces or removing regulation of prices, quantities, entry, and other aspects of economic activity in a firm or industry

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10
Q

social interest theory

A

the theory that regulation achieves and efficient allocation of resource

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11
Q

Capture theory

A

the theory that the regulation serves the self interest of the producer and results in max profit, underproduction, and deadweight loss

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12
Q

Marginal cost pricing rule

A

a rule that sets price equal to marginal cost to achieve and efficient output

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13
Q

Average cost pricing rule

A

a rule that sets price equal to average total cost to enable a regulated firm to avoid economic loss

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14
Q

Rate of return regulation

A

a regulation that sets the price at a level that enables a firm to earn a specified target rate of return on its capital

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15
Q

Price cap regulation

A

a rule that specifies the highest price that a firm is permitted to set, a price ceiling

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16
Q

earnings sharing regulation

A

a regulation that requires firms to make refunds to customers when profits rise above target level

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17
Q

Gross Domestic Product

A

the market value of all the final goods and services produced within a country in a given time period

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18
Q

Final good or service

A

a good or service that is produced for its final user and not as a component of another good or service

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19
Q

Intermediate good or service

A

a good or service that is used as a component of a final good or service

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20
Q

consumption expenditure

A

the expenditure by households on consumption goods and services

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21
Q

Investment

A

the purchase of new capital goods and additions to inventories

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22
Q

government expenditure on goods and services

A

the expenditure by all levels of governemtn on goods and services

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23
Q

net exports of goods and services

A

he value of exports of goods and services minus the value of imports of goods and services

24
Q

Exports of goods and services

A

items that firs in the united states produce and sell to the rest of the world

25
Q

imports of goods and services

A

items that households firms and governments in the US buy from the rest of the world

26
Q

Net taxes

A

taxes paid minus cash benefits recieved from governments

27
Q

saving

A

the amount of income that is not paid in net taxes or spent on consumption goods and services

28
Q

Net domestic product at factor cost

A

the sum of the wages interest rent and profit

29
Q

depreciation

A

the decrease in the value of capital that results from its use and from obsolenscence

30
Q

statistical discrepancy

A

the discrepancy between the expenditure approach and the income approach estimates of GDP calculated as the GDP expenditure total - the GDP income total

31
Q

Gross National product

A

the market value of all the final goods and services produced anywhere in the world in a given time period by the factors of production supplied by the residents of the country

32
Q

disposable personal income

A

income received by households-personal income taxes paid

33
Q

Real GDP

A

the value of the final gods and services produced in a given year expressed in terms of the prices in a base year

34
Q

Nominal GDP

A

The value of final goods and services produced in a given year expressed in terms of the prices of that same year

35
Q

Standard of living

A

The level of consumption of goods and services that people enjoy on average

36
Q

Real GDP per person

A

Real GPD divided by the population

37
Q

Potential GDP

A

The value of real GDP when all the economies factors of production are fully employed

38
Q

Business cycle

A

a periodic byt irregular up and down movement of total production and other measures of economic activity

39
Q

Recession

A

A period during which real GPD decreases for at least 2 successive quarters or defined by the NBER as a period of significant decline in total output, income, employment and trade usually lasting 6 months to a year and marked by contractions in many secotrs of the economy

40
Q

household production

A

the production of goods and services in the home

41
Q

Working age population

A

the total number of people aged 16 years and over who are not in jail, hospital, or other form of institutional care or are in the US armed forces

42
Q

Labor

A

the number of people employed plus the number of unemployed

43
Q

Unemployment rate

A

The percentage of the people in the labor force who are unemployed

44
Q

Labor force participation rate

A

LFPR=labor force/working age population

45
Q

Marginally attached worker

A

A person who does not have a job, is available and willing to work, has not made specific

46
Q

Discouraged worker

A

a marginally attached worker who has not made specific effort to find a job within the past 4 weeks because previous unsuccessful attempts were discouraging

47
Q

Full time workers

A

people who usually work 35 hours or more a week

48
Q

Part time workers

A

people who usually work less than 35 hours a week

49
Q

Part time for economic reasons

A

people who work 1-34 hours per week but are looking for full time work and cannot find it because of unfavorable business conditions

50
Q

Frictional unemployment

A

the unemployment that arises from people entering and leaving the labor force from quitting jobs to finding better ones and from the ongoing creation and destructive of jobs from normal labor turnover

51
Q

structural unemployment

A

the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs

52
Q

cyclical unemployment

A

the fluctuating unemployment over the business cycle that increases during a recession and decreases during an expansion

53
Q

Natural unemployment rate

A

the unemployment rate when the economy is at full employment

54
Q

Full employment

A

when there is no cyclical unemployment or equivalently, when all the unemployment is frictional or structural

55
Q

potential GDP

A

the value of real GDP when the economy is at full employment, all the economies factors of production are employed

56
Q

output gap

A

real GDP- portential GDP expressed as a percentage of potential GDP

Economics 190 (4 decks)

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