Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

jahrdenas_geas > Economics > Flashcards

Economics Flashcards

1
Q

When the income increases, this property of a product defines if the allotment of budget for this product decreases or increases

A

Income Elasticity

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

When Income Elasticity is Greater than 1:

As Income increases, the percentage of the income allotted for purchasing this product ______

A

Increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

When Income Elasticity is Less than 1:

As Income increases, the percentage of the income allotted for purchasing this product ______

A

Decreases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

A Necessity Product has an Income Elasticity of _____

A

I.E. < 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

A Luxury Product has an Income Elasticity of _____

A

I.E. > 1

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Define the Sellers and Buyers for this market situation:

Perfect Competition

A

Sellers: Many
Buyers: Many

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define the Sellers and Buyers for this market situation:

Monopoly

A

Sellers: One
Buyers: Many

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Define the Sellers and Buyers for this market situation:

Monopsony

A

Sellers: Many
Buyers: One

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define the Sellers and Buyers for this market situation:

Bilateral Monopoly

A

Sellers: One
Buyers: One

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Define the Sellers and Buyers for this market situation:

Duopoly

A

Sellers: Two
Buyers: Many

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define the Sellers and Buyers for this market situation:

Duopsony

A

Sellers: Many
Buyers: Two

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Define the Sellers and Buyers for this market situation:

Oligopoly

A

Sellers: Few
Buyers: Many

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Define the Sellers and Buyers for this market situation:

Oligopsony

A

Sellers: Many
Buyers: Few

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Define the Sellers and Buyers for this market situation:

Bilateral Oligopoly

A

Sellers: Few
Buyers: Few

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

A market situation wherein only one entity is assigned to produce a certain product/ provide a service to minimize the cost of the whole economy

A

Natural Monopoly

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

The Supply ______ when the number of units increases

A

Increases :v

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

The Demand ______ when the number of units increases

A

Decreases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

The Supply ______ when the Price increases

A

Increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

The Demand ______ when the Price increases

A

Decreases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Define the Law of Supply and Demand

A

Under Perfect Competition, The Price of the Product is going to be the price where the supply and demand are equal

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Define The Law of Diminishing Returns

A

Adding resources (ex. more employees) is only effective up to a certain point, the benefit of adding resources diminishes as you keep on adding that specific resource

“The Gain is not worth the Pain”

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Interest that grows linearly; interest only bases its growth on initial principal/investment

A

Simple Interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Formula for Simple Interest

A

I = P i n

P - Initial value/Principal
i - Interest Rate
n - Period of interest Rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Formula for Future Cost of Simple Interest

A 
F  = I + P
F = P(1 + (i n))

I - Interest
P - Initial/Present/Principal Value
i - Interest Rate
n - Period of interest Rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Type of Simple Interest that assumes 30 days in one month

A

Ordinary Simple Interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Formula for the period(n) of Ordinary Simple Interest

A

n = (#days elapsed) / 360

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Type of Simple Interest that accounts for the exact number of days in a month, including leap years

A

Exact Simple Interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Formula for the period(n) of Exact Simple Interest

A

n = (#days elapsed) / (365 OR 366(leap year))

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

How to determine if a year is a leap year?

A

If the year is divisible by 4, it is a leap year

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

How to determine if a year is a century year?

A

if a year ends with two zeroes (example, 1600, 1700, 2000), if it is divisible by 4, it is a century year, which is counted as a leap year

31
Q

How to determine exact number of days in a year?

A

Use knuckles(31 for knuckle, 30 for crevice between knuckles):

Jan -31
Feb -28(exception to 31-30 rule) or 29(if leap year)
Mar-31
Apr-30
May-31
Jun-30
July-31
Aug-31(start @ a knuckle for Aug)
Sept-30
Oct-31
Nov-30
Dec-31
32
Q

Interest that grows exponentially; Interest from previous period is also subjected to the Interest Rate when compounded in the next period

A

Compound Interest

33
Q

Formula for Future Value in Compound Interest

A

F = P(1 + i)^n

P - present value
i - interest rate
n - Period of Interest Rate

34
Q

Compound interest that compounds at every single instant of time (number of periods is infinite)

A

Continuous compound interest

35
Q

Formula for Future Value in Continuously Compounded Interest

A

F = P e^(NR . N)

P - Present Worth
e - natural logarithm number
NR - Nominal Rate (annual, to match ‘N’)
N - Number of years

36
Q

An Interest rate distributed throughout the whole year by ‘m’ portions

A

Nominal rate

37
Q

If a nominal rate ‘NR’ is given, and is compounded ‘m’ times in a year, how do you interpret the growth of interest?

A

in one year, there are ‘n’ simple interests, with an interest rate of (NR/m), where every period applies the interest rate on the cumulative value of the account, including previous interests obtained

38
Q

Formula for Future worth of Compound Interest using Nominal Rates

A

F = P ( 1+ (NR/m) )^m

P - Present Worth
NR - Nominal Rate
m - # period divisions in a year

39
Q

A rate that is observed in a yearly basis, As if the present worth is subjected to a simple interest rate from initial to final value

A

Effective rate

40
Q

Formula for Effective Rate

A

ER = [ ( 1 + (NR / m) )^m ] - 1

P - Present Worth
NR - Nominal Rate
m - # period divisions in a year

41
Q

when ‘m’ is not equal to 1,

Effective rate is ______ Nominal Rate

A

Greater than

42
Q

when ‘m’ is equal to 1,

Effective rate is ______ Nominal Rate

A

Equal to

43
Q

A uniform series of payments that occur at equal intervals of time

A

Annuity

44
Q

An annuity where payments are made after each period

A

Ordinary Annuity

45
Q

An annuity where payments are made before each period

A

Annuity Due

46
Q

An annuity where the Series of payments are paid some time after the transaction is made

A

Deferred annuity

47
Q

An annuity with an infinite number of uniform payments

A

Perpetuity

48
Q

Formula for Present Worth of a Perpetuity

A

P = A / i

A - annuity
i - Interest Rate

49
Q

Formula for the sum of annuity (AKA Future Worth of annuities)

A

S = A [ (1 +i)^n - 1 ] / i

A - annuity
i - Interest Rate
n - # of periods

NOTE: ‘i’ must match ‘n’ periods

50
Q

Formula for the Present Worth of Annuity

A 
P = S / [(1+i)^n] 
P = A [ (1 +i)^n  -  1 ]  /  [ i ( 1 + i ) ^ n ]

S - Sum of annuities (Future Worth)
A - annuity
i - Interest Rate
n - # of periods

NOTE: ‘i’ must match ‘n’ periods

51
Q

If ‘i’ does not match ‘n’, How do you convert into an ‘i’ that matches ‘n’?

A

Shift Solve for ‘i(new)’:

[(1 + NR/m(old))^m(old) ] - 1 = [(1 + i(new)/n(new) )]^n(new) - 1

NR - Nominal Rate
m(old) - Period that does not match the number of annuities/interest rate
i(new) - new ‘i’ to use in annuity formulas
n(new) - new period that matches number of annuities/interest rate

52
Q

An annuity still with equally spaced time intervals, but with non-uniform payments, where payments increases/decreases in every period, following a certain trend

A

Gradient

53
Q

A gradient wherein the annuities’ value increases in a linear manner

A

Arithmetic Gradient

54
Q

A gradient wherein the annuities’ value increases in an exponential manner

A

Geometric Gradient

55
Q

Formula Present Worth of Gradient

A

Format of summation:
∑(Function , Lower Limit , Upper Limit)

P = ∑( F(n) / [ (1+i)^n ] , 1 , Period end)

F(n) - Future worth as a function of ‘n’, since annuity changes for every iteration (Form equation for F(n) at your own discretion)

56
Q

A Depreciation Model that follows a linear manner of depreciation as time progresses

A

Straight Line Method

57
Q

CALTECH: Straight Line Method

A

Use Stat mode A + Bx

and plot
( 0 , First Cost),
and then plot
( (period at salvage value), Salvage Value)

and use Ybar for obtaining book value at a specific period

58
Q

A Depreciation Model that depreciates at a constant Percentage annually

A

Declining Balance Method

59
Q

Another term for Declining Balance Method

A

Matheson Formula

60
Q

CALTECH: Declining Balance Method

A

Remember: Constant depreciation percentage (%d)

Use Stat mode AB^x

Simply Plot points given
@ period 0, First cost
@ period 1, (First Cost x (1-%d))

And use Xbar Ybar depending on what is asked for

61
Q

A Depreciation Model that depreciates uniformly, like how an annuity uniformly increases ¯_(ツ)_/¯

A

Sinking Fund Method

62
Q

Formula for Sinking Fund Method

A 
Use Stat mode AB^x
1st item will start with
(period 0 , 1) 
2nd item:
(period 1 , [1 + (NR/m)])
In stat mode, use 'B' in Shift Stat Regression menu for:

(First Cost - Salvage Value) =
d ∑( [B ^(x-1)] , 1 , final period)

∑ is a STAT Mode function
d - annual Depreciation Cost(not percentage)

63
Q

CALTECH: Double Declining Balance Method

A

Use Stat mode AB^x
points given :

@ period 0, First cost;
@ period 1, (First Cost x (1 - {2/(Salvage year}))

And use Xbar Ybar depending on what is asked for

64
Q

A Depreciation Model which is an accelerated method for calculating an asset’s depreciation. This method takes the asset’s expected life and adds together the digits for each year

A

Sum of Year’s Digit Method

65
Q

CALTECH: Sum of Years Digit Method

A

Use Stat mode A+Bx+Cx^2 (Must have 3 plot points)
points given :

@ period 0, First cost;
@ period ‘L’, (Salvage Value)
@ Period ‘L +1’, (Salvage Value)

And use Xbar Ybar depending on what is asked for

66
Q

The Rate attributed to the depreciation of money value

A

Inflation Rate

67
Q

Formula for Future worth, including inflation rate

A

F = P (1 + i)^n x 1 / (1+f)^n

f - Inflation rate

68
Q

Formula for Discount

A 
d = 1 - (1 / (1+i))
i = d / (1-d)

d - rate of discount

69
Q

CALTECH: Nominal to effective rate

A

Use Stat mode AB^x

X column represents the periods in compounding (quarterly, etc)
Y represents the grown value of money (starts af 1)

1st item will start with
(period 0 , 1)
2nd item:
(period 1 , [1 + (NR/m)])

And use (n Ybar) to find the effective rate after n periods

70
Q

CALTECH: Ordinary Annuity

A

Use Stat mode AB^x

1st item will start with
(period 0 , 1)
2nd item:
(period 1 , [1 + (NR/m)])

Obtain ‘B’ in Shift Stat Regression,
Then, type in calculator as is:

∑([B^(-x)] , A1 , Af)

A1 -annuity period at first pay
Af - annuity period at final pay

Store as any value (lets say, at ‘M’)

Finally, use in formula
P = A x M

P-Present Value
A-Annuity
M-Value of summation previously performed

71
Q

CALTECH: Annuity Due

A

Same as Ordinary annuity, but use

∑([B^(-x)] , (A1 - 1) , (Af - 1))

72
Q

CALTECH: Future worth of Annuity

A

Following up on CALTECH of Annuity:
F(@period n) = P(n(Ybar))

OR

F(@period n) = ∑([B^(x-1)] , A1 , Af)

73
Q

CALTECH: Present Value of Arithmetic Gradient

A

Use Stat mode AB^x

1st item will start with
(period 0 , 1)
2nd item:
(period 1 , [1 + (NR/m)])

Obtain ‘B’ in Shift Stat Regression,
Then, type in calculator as is:

P = ∑([A + G(x-1)]B^(-x) , 1 , period end)

G - Change in Annuity/Cash Flow
A - 1st annuity

74
Q

CALTECH: Present Value of Geometric Gradient

A

Use Stat mode AB^x

1st item will start with
(period 0 , 1)
2nd item:
(period 1 , [1 + (NR/m)])

Obtain ‘B’ in Shift Stat Regression,
Then, type in calculator as is:

P = ∑([A(1 + g)^(x - 1)]B^(-x) , 1 , period end)

g - Change in %annuity/Cash FLow
A - 1st payment

jahrdenas_geas (9 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions