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Econ Final > Econ Final > Flashcards

Econ Final Flashcards

1
Q

What is the study of economics concerned with?

A

How society manages scarcity of resources

independent decisions, decisions of firms, societal concerns

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2
Q

Opportunity cost

A

whatever is given up to obtain something (time, money)

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3
Q

marginal change

A

small, incremental adjustment

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4
Q

tradeoff

A

when you spend (time, money) doing one thing, there is less (time, money) for something else

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5
Q

market

A

group of buyers and sellers

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6
Q

Production Possibilities Frontier

A

How much of a good or service can be produced in a certain amount of time

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7
Q

Point above production possibilities frontier

A

that amount of a good or service is impossible to produce in that amount of time

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8
Q

point below production possibilities frontier

A

could be producing more of that good or service at that time

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9
Q

does a change in price shift supply or demand?

A

neither, point will move along curve

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10
Q

demand shifters:

A
  • expectations of consumers
  • number of consumers
  • tastes
  • price of related goods
  • consumer income
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11
Q

supply shifters-

A
  • weather
  • government policies
  • number of sellers
  • expectations of sellers
  • input price
  • technology
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12
Q

Quantity demanded

A

the amount of a good buyers are willing to and able to purchase
(moves along curve)

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13
Q

law of demand

A

quantity demanded of a good falls when the price of the good rises

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14
Q

quantity supplied

A

amount of a good that sellers are willing to and able to sell
(moves along curve)

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15
Q

law of supply

A

quantity supplied of a good rises when the price of a good rises

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16
Q

expectation of consumers

A

demand shifters

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17
Q

number of consumers

A

demand shifter

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18
Q

tastes

A

demand shifter

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19
Q

price of related goods (complementary and substitute)

A

demand shifters

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20
Q

consumer income

A

demand shifter

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21
Q

weather

A

supply shifter

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22
Q

government policies

A

supply shifter

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23
Q

number of sellers

A

supply shifter

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24
Q

technology

A

supply shifter

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25
Q

input price

A

supply shifter

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26
Q

expectations of sellers

A

supply shifter

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27
Q

price floor

A

lowest a price can be

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28
Q

price ceiling

A

highest a price can be

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29
Q

normal good

A

a good you would normally buy with a normal income (steak)

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30
Q

inferior good

A

a good you would buy because the better quality item couldn’t be bought with that income (ramen)

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31
Q

complementary good

A

a good often bought alongside another (hotdogs and bun)

32
Q

substitute good

A

a good bought instead of another good (hotdogs instead of hamburgers)

33
Q

normal rate of unemployment

A

inevitable unemployment that will always be there

34
Q

cyclical unemployment

A

“sick” economy
happens during recession or depression
when unemployment rate increases from normal rate

35
Q

structural unemployment

A

long term unemployment when there are fewer jobs than people

36
Q

frictional unemployment

A

short term unemployment that happens when people are looking for a job that suits their skills

37
Q

discouraged workers

A

workers that have stopped looking for work but are still without jobs

38
Q

who sends survey to calculate unemployment rate

A

bureau of labor statistics

39
Q

labor force

A

employed+unemployed

40
Q

employed

A

full time or part time workers, unpaid workers in a family business, self employed

41
Q

unemployed

A
  • 16+
  • able to work
  • have looked for work in past 4 weeks
42
Q

unemployment rate formula

A

unemployed/labor force

43
Q

cpi (consumer price index)

A

what and quantity of what consumers buy

44
Q

base year cpi

A

100

45
Q

cpi formula

A

100xbasket price this year/basket price base year

46
Q

inflation rate formula

A

100%xcpi current year-cpi last year/cpi last year

47
Q

who calculates cpi

A

bureau of labor statistics

48
Q

real interest rate

A

adjusted for inflation

nominal interest rate-inflation rate

49
Q

nominal interest rate

A

not adjusted for inflation

50
Q

Demand pull inflation

A

when the aggregate demand exceeds aggregate supply

51
Q

cost push inflation

A

when overrall prices increases due to an increase in cost of wages or materials

52
Q

Aggregate demand

A

GDP, demand for all finished goods and services produced in the economy

53
Q

elasticity

A

how responsive the consumer is to a change in price

54
Q

inelastic

A

not responsive to a change in price

55
Q

is cereal elastic or inelastic

A

inelastic

56
Q

are rice krispies elastic or inelastic

A

elastic

57
Q

price elasticity of demand

A

percentage change in quantity/percentage change in price

58
Q

liquidity

A

how easily something can be used as a medium of exchange

59
Q

rank from most to least liquid

  • painting
  • money in bank account
  • cash
A
  1. cash
  2. money in bank account
  3. painting
60
Q

functions of money

A
  • medium of exchange
  • standard of value (unit of account)
  • store of value
61
Q

medium of exchange

A

an item buyers give sellers to purchase a good or service

62
Q

unit of account (standard of value)

A

yardstick people use to post prices and record debts

63
Q

store of value

A

item people use to transfer purchasing power from present to future

64
Q

Cost of Living Adjustment (COLA)

A

an agreement based on the cpi negotiated with boss that increases your salary each year according to inflation rate

65
Q

Classical economics

A

market economics worked except for temporary upheavals

laissez faire

66
Q

Keynesian theory

A

supported government involvement and spending

67
Q

keynesian multiplier

A

used to predict changes in gdp based on changes in spending and taxes
one person’s spending becomes another’s income

68
Q

Marginal propensity to save

A

change in saving/change in disposable income

69
Q

marginal propensity to consume

A

change in spending/change in disposable income

70
Q

spending multiplier

A

1/mps

71
Q

tax multiplier

A

-mpc/mps

72
Q

fiscal policy

A

taxes and spending applied by congress with long inside lag, short outside lag

73
Q

monetary policy

A

federal reserve manipulation manipulation of the money supply with a short inside lag and long outside lag

74
Q

monetary policy actions

A
  • buy bond
  • manipulate reserve requirement
  • change interest rate
75
Q

fiscal policy actions

A
  • reduce/increase tax rates

- increase/decrease gov spending

76
Q

indexation

A

dollar amount is indexed for inflation if automatically corrected for inflation by contract/law

Econ Final (1 decks)

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