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Macroeconomics > MMacro ch 1-4 > Flashcards

MMacro ch 1-4 Flashcards

1
Q

The DEMAND CURVE

A

Reflects an INVERSE RELATIONSHIP between PRICE and QUANTITY

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2
Q

CONSUMER SURPLUS

A

Marginal BENEFIT
WILLINGNESS TO PAY
VALUE

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3
Q

PRODUCER SURPLUS

A

marginal COST
LOWEST acceptable price
PROFIT

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4
Q

If the CURRENT level of OUTPUT is at Q3, then…

A

Society should produce FEWER shoes

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5
Q

An ADVANCE technology would cause

A

the SUPPLY CURVE to SHIFT RIGHT

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6
Q

ABOVE market equilibrium (MIN)

A

PRICE FLOORS

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7
Q

What causes surplus’ and fewer changes

A

PRICE FLOORS

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8
Q

BELOW market equilibrium (MAX- cause SHORTAGES)

A

PRICE CEILINGS

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9
Q

PRICE FLOORS and PRICE CEILINGS cause what?

A

CAUSE INEFFICIENCIES

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10
Q

where would the ALLOCATION of resources be the most efficient?

A

A + B

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11
Q

the OPTIMAL ALLOCATION of resources is found

A
  1. equilibrium
  2. Where MB = MC
  3. consumer / Producer SURPLUS are MAXIMIZED
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12
Q

The LAW of demand states that PRICE and QUANTITY demanded are

A

INVERSELY RELATED

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13
Q

A marginal thinker takes action when marginal BENEFITS ARE _____ to marginal COSTS.

A

ARE GREATER THAN

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14
Q

CETERIS PARIBUS means

A

” all other things CONSTANT” or “NOTHING else changes”

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15
Q

each of the following IS a demand curve shift EXCEPT

A

the PRICE of the good ITSELF

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16
Q

what is a DEMAND CURVE SHIFT

A
  1. change in customer incomes
  2. PRICES or related products
  3. future expectations of PRICE CHANGES
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17
Q

if e-cigarattes were banned and tobacco use increased, we might conclude that

A

e-cigs and tobacco products are SUBSTITUTES

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18
Q

the production possibilities curve that is a straight line has

A

a NEGATIVE slope that is constant as we move along from LEFT TO RIGHT

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19
Q

at the EQUILIBRIUM PRICE

A

there are NO pressure on PRICE to either rise of fall

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20
Q

Cyclical unemployment does not include

A

Frictional, structural, and natural unemployment

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21
Q

the CPI was 238 in one year and 244 the following year. How much did PRICE rise between those 2 years?

A

7.14% ???

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22
Q

T/F: Discouraged workers are counted as unemployed

A

FALSE

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23
Q

T/F the minimum wage is a good example of a PRICE CEILING?

A

FALSE

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24
Q

T/F: To an ECONOMIST, and increase in quantity demanded is the same thing as an increase in demand ?

A

FALSE

25
Q

a market is said to be in DIS-EQUILIBRIUM…

A

it exhibits wither a SURPLUS or a SHORTAGE

26
Q

John has been described as lazy and is not interested in finding work. We would count him as?

A

not in the labor force
discouraged worker

27
Q

Table showing the relationship between priceand quantity demanded

A

demand schedule

28
Q

Graph of the relationship between price andquantity demanded

A

demand curve

29
Q

Horizontal sum of all individual quantities demanded by each buyer in the market at each price

A

market demand

30
Q

demand INCREASES due to an INCREASE in a customer’s income, other things are constant

A

Normal good

31
Q

demand DECREASES and the customer’s income increases and other things are constant
Ex. store brands

A

Inferior good

32
Q

Goods that can be used in the place of another good
INCREASE of the price of one
Leads to an increase in DEMAND for the other (ex. Hot dogs and burgers )

A

substitutes

33
Q

Goods that are used together
INCREASE in the price of one
DECREASE in DEMAND for the other (pancake & syrup)

A

complements

34
Q

Supply determinants
remember to not trip Peter Parker

A

Resource prices (input)
Technology
Number of SELLERS
Taxes and subsidies
Prices of other goods and services
Producer Expectations

35
Q

supply determinants:
decrease in price of microchips = increase of supply of

A

resource prices (inputs)

36
Q

supply determinants:
development of more effective wireless technology increases the supply of cell phones

A

technology

37
Q

supply determinants:
increase in the number of tattoo parlors = increase of supply of tattoos, formation of women basketball leagues = increase women basketball games

A

number of sellers

38
Q

supply determinates:
Expectation of a substantial rise in future log prices decreases the supply of logs today

A

producer expectations

39
Q

shift demand curve

A

Price of the good itself,
Income,
Taxes, Expectations,
Number of Buyers,
Price of related goods

40
Q

Other things equal, as the price rises, the quantity supplied rises, and as the price rises, the quantity supplied falls* A direct relationship.. what law is this?

A

law of supply

41
Q

Price as a rationing device

A

Scarcity exists
RESOURCES: producers who pay the price of them
GOODS: the buyers who pay for the goods to be produced
- all rational devices discriminate

42
Q

Change in the demand curve :

caused by a price increase
move from point A to point B
what happens

A

Price INCREASES
Quantity DECREASES

43
Q

What causes a change in the demand curve ( main reason- think of yourself)

A

change in price

44
Q

change in demand ( how does it shift and why?)

A

demand shift

decrease in demand = SHIFT LEFT
increase in demand = SHIFT RIGHT

45
Q

The weighted averageof prices of a specific set of goods and services purchasedby a typical household; a widely cited index number forthe price level

A

customer price index

46
Q

unemployment rate formula

A

number of unemployed / civilian labor forcex 100

47
Q

employment rate

A

number of employed persons / civilian noninstitutional population x 100

48
Q

caused by changing marketconditions and represented by qualified individualswith transferable skills who change jobs

A

frictional unemployment

49
Q

structural changes in the economy that eliminatesome jobs and create others for which the unemployedare unqualified

A

structural unemployment

50
Q

Unemployment caused byfrictional and structural factors in the economy

A

Natural unemployment

51
Q

Define economics

A

science of scarcity
The wants are GREATER than the limited resources available

52
Q

WHAT IS in economics

A

POSITIVE STATEMENT

53
Q

WHAT SHOULD BE in economics

A

NORMATIVE STATEMENT

54
Q

The numerical tabulation of the quantity supplied of a good at different prices. A supply schedule is the numerical representation of the law of supply.

A

supply schedule

55
Q

what happens when a supply curve shifts left

A

decrease in supply

56
Q

what happens when there is a supply curve to the right ( willing to sell more supply at every price)

A

increase in supply

57
Q

UNSEEN forces in a FREE MARKET to reach equilibrium.
interest and freedom of production and consumption

A

invisible hand

58
Q

labor force participation rate

A

(civilian labor force/civilian noninstitutionalized population x 100).

Macroeconomics (5 decks)

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