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Econ 208 > Formulas and def > Flashcards

Formulas and def Flashcards

1
Q

Types of resources

A

land, labour, capital

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2
Q

3 problems of planned eco

A

information, incentive, chronic shortage

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3
Q

market eco thinker

A

Smith

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4
Q

positive statement

A

no value judgement

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5
Q

normative statement

A

value judgement

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6
Q

dependent variable

A

endogenous

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7
Q

independent variable

A

exogenous

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8
Q

3 different types of data

A

cross-sectional, time-series, panel

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9
Q

slope of a straight line

A

ΔA/ΔB

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10
Q

flow

A

over time

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11
Q

stock

A

at a specific point in time

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12
Q

augmentation in D

A

rightward shift of D curve

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13
Q

decrease in D

A

leftward shift of D curve

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14
Q

change in S/D

A

shift of the curve

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15
Q

change in QS/QD

A

mouvement along the curve

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16
Q

equilibrium

A

QS=QD

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17
Q

elastic

A

> 1

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18
Q

inelastic

A

< 1

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19
Q

unit elastic

A

= 1

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20
Q

P elasticity of D

A

%ΔQd/%ΔP

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21
Q

vertical D curve

A

perfectly inelastic

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22
Q

horizontal D curve

A

perfectly elastic

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23
Q

P elasticity of S

A

%ΔQS/%ΔP

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24
Q

income elasticity of D

A

%ΔQD/%Δ income

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25
Q

income elasticity for inferior good

A

elasticity < 0

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26
Q

income elasticity for normal good

A

elasticity > 0

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27
Q

income elasticity for necessities

A

positive but < 1

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28
Q

income elasticity for luxuries

A

positive but > 1

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29
Q

cross P elasticity of D

A

%ΔQDx/%ΔPy

30
Q

cross elasticity of substitutes

A

> 0

31
Q

cross elasticity of complements

A

< 0

32
Q

binding price floor

A

above equilibrium

33
Q

binding price ceiling

A

under equilibrium

34
Q

losers and winners of rent controls

A

winners: exiting tenants
losers: landlords + potential future tenants

35
Q

transitivity

A

x > y > z = x > z

36
Q

different types of indifference curves

A

crossing, upward sloping, thick

37
Q

marginal rate of substitution

A

the slope of the curve at a specific point

38
Q

perfect substitutes

A

parallel straight curves

39
Q

perfect complements

A

parallel 90° curves

40
Q

imperfect substitutes ( normal goods)

A

non-straight curve

41
Q

diminishing marginal utility

A

the more you have, the less marginal satisfaction you get

42
Q

budget set

A

all affordable combinations of goods and services given a consumer’s income and prices

43
Q

budget line

A

graphical representation of budget set

44
Q

utility maximizing condition

A

MU1/MU2 = P1/P2
or
MU1/P1 = MU2/P2

45
Q

real income

A

income expressed in terms of the purchasing power of money income

46
Q

substitution effect

A

change in the QD of a product resulting from a change in its relative P

47
Q

income effect

A

change in QD resulting from a change in real income

48
Q

giffen good

A

inferior good with a positively sloped D curve and a large income effect (large proportion of tot expenditure)

49
Q

normal good (graph)

A

income and substitution effect in same direction

50
Q

inferior good (graph)

A

income effect partially affects substitution effect

51
Q

giffen good (graph)

A

income effect outweights the substitution effect

52
Q

conspicuous good

A

snob appeal

53
Q

consumer value

A

difference between the total value that consumers place on all units consumed of a product and the P they actually pay

54
Q

production function

A

Q = f(L,K)

55
Q

Accounting profits

A

Revenues - Explicit costs

56
Q

Eco profits

A

Revenues - (Explicit + Implicit Costs)

57
Q

law of diminishing returns

A

equal increase in work effort begins to add less and less to total output

58
Q

ATC curve

A

U-shaped

59
Q

cost minimization condition

A

MPk/MPl = Pk/Pl
or
MPk/Pk = MPl/Pl

60
Q

LRAC

A

falling: decreasing costs, increasing returns
constant: eco of scales, min efficient scale, constant costs and returns
increase: increased costs, decreased returns

61
Q

STRATC

A

tangent to LRAC at optimal level of output

62
Q

perfectly competitive market

A

each firm has 0 market power

63
Q

profits maximization

A

MR = MC

64
Q

MR > MC

A

increase output

65
Q

MR < MC

A

decrease output

66
Q

condition to shut down

A

Revenue < AVC

67
Q

LR industry equilibrium

A

when profits = 0 (break-even P)

68
Q

industries with many small firms

A

perfectly competitive, monopolistic competition

69
Q

industries with a few large firms

A

oligopoly

70
Q

imperfect competition

A

firms differentiate their products, set prices, non-price competition

Econ 208 (1 decks)

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