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Economics > Econ Final List > Flashcards

Econ Final List Flashcards

1
Q

Determinants of price elasticity of supply

A
  1. How much costs rise as output increases
  2. Time period considered
  3. Ability to store stock
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2
Q

Why subsidies are issued in price control

A
  1. Bolster production
  2. Guarantee supply of necessity goods
  3. Compete with foreign production
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3
Q

Reasons for min price control

A
  1. Generate revenue for producers

2. Minimum wage

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4
Q

Reasons for max price control

A
  1. Make necessity goods available

2. Make a market more competitive

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5
Q

Market failure

A
  1. Lack of public goods
  2. Undersupply of merit goods
  3. Oversupply of demerit goods
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6
Q

Determinants of elasticity

A
  1. Number of closeness of substitutes
  2. Necessity and degree of definition (specific/non-specific)
  3. Time period
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7
Q

Levels of production

A
  1. Primary (agriculture)
  2. Secondary (manufacturing)
  3. Tertiary (service)
  4. Quarternary (informational tech/telecommunications)
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8
Q

Economies of scale

A
  1. Specialization
  2. Divisions of labor
  3. Bulk buying
  4. Financial economies
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9
Q

Determinants of aggregate demand

A
  1. Consumption
  2. Investment
  3. Gov. Spending
  4. Net exports
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10
Q

Types of fiscal policy

A

Contractionary (raising taxes, cutting spending)

Expansionary (cutting taxes, increasing spending)

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11
Q

Determinants of aggregate supply

A
  1. Wage rates
  2. Cost of raw materials
  3. Price of imports
  4. Change in taxes/subsidies
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12
Q

Interventionist policies

A
  1. Investment in human capital
  2. Research and development
  3. Provision of infrastructure
  4. Direct support to industries
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13
Q

Market - based policies

A
  1. Reduction/elimination of income taxes
  2. Reduction/elimination of corporate taxes
  3. Labor market reforms
  4. Deregulation
  5. Privatization
  6. Increase competition
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14
Q

Costs of unemployment

A
  1. Cost of individual
  2. Cost to society
  3. Cost to economy
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15
Q

Costs of inflation

A
  1. Loss of purchasing power
  2. Effect on saving
  3. Effect on interest rates
  4. Effect on international trade
  5. Uncertainty
  6. Labor unrest
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16
Q

Costs of deflation

A
  1. Unemployment
  2. Decrease in Investment
  3. Cost to debtors
17
Q

Why countries trade

A
  1. Lower prices
  2. Greater choice
  3. Differences in resources
  4. Economies of scale
  5. Increased competition
  6. More efficient allocation of resources
  7. Source of foreign exchange
18
Q

Arguments for protectionism

A
  1. Domestic employment
  2. Low-cost labor
  3. Prevent dumping
  4. Infant industries
19
Q

Arguments against protectionism

A
  1. Higher prices
  2. Less choice
  3. Reduced competition and innovation
  4. Hinders growth
20
Q

Forms of protectionism

A

Tariff
Quota
Subsidy

21
Q

Administrative barriers

A
  1. “Red tape”
  2. Health/safety
  3. Embargoes
  4. Nationalistic campaigns
22
Q

Advantage of high exchange rate

A
  1. Downward pressure on inflation
  2. More importation
  3. Domestic efficiency
23
Q

Disadvantage of high exchange rate

A

Damage to export/import industries

24
Q

Adv. of low exchange rate

A
  1. Greater employment in export/domestic industries
25
Q

Disadvantage of low exchange rate

A

Inflation

26
Q

Advantage of fixed exchange rate

A
  1. Reduce uncertainty
  2. Strict inflation policies
  3. Reduce speculation
27
Q

Disadvantage of fixed exchange rate

A
  1. Manipulation of interest rates
  2. Maintain foreign reserves
  3. Trade disputes
28
Q

Adv of floating exchange rate

A
  1. Free use of interest rate as monetary tools
  2. Self-adjusting
  3. No need for foreign reserves
29
Q

Disadvantage of floating exchange rate

A
  1. Uncertainty
  2. Political motivations
  3. Inflationary problems
30
Q

Economic integration levels

A
  1. Preferential trading areas
    (Reduce protectionism)
  2. Free trade agreement (NAFTA) eliminates protectionism
  3. Customs Union (same trading policy)
  4. Common market (European Union- free movement of capital and labor, all members have same health/safety/labor standards based off of production)
  5. Economic/monetary union (Eurozone)
  6. Political/economic union (fiscal policy)

Economics (5 decks)

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