Brainscape's Knowledge GenomeTM

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


See full index

Econ 253 > MT1 > Flashcards

MT1 Flashcards

1
Q

Opportunity Cost Formula

A

=Give up/ Gain

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

When is Technical Efficiency achieved and what does it mean?

A

Efficiency in production (supply side)
Achieved when production is organized to minimize input required to produce a given output

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

When is Cost Effectiveness achieved and what does it mean?

A

Cost minimizing (supply)
Achieved when production is organized to reduce costs of producing a given output, NOTE: requires technical efficiency

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

What is allocative efficiency?

A

(demand) based in the value people place on the goods and services to maximize welfare of a community

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

Pareto Efficiency

A

when it is impossible to reallocate resources to make a least one person better off without making someone else worse off.

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

Pareto improvement

A

if gains to winner, from reallocation, are sufficiently large that the winners could compensate the losers and still be better off its allocatively efficient

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

What is distributional equity and the two kinds?

A

asks if the distribution of goods among members of society is fair, Horizontal Equity
Vertical Equity

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

Horizontal Equity

A

equal people being treated equally
ex: those with equal income pay equal taxes

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

Vertical Equity

A

unequal’s being treated unequally
ex: tax obligations vary depending on income

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

Procedural Equity

A

fairness of the process if the distribution process by which a process is allocated fairly, ex organ transplant allocation

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

What are the three condition of an efficient market?

A
  1. absence of market power (on supply and demand sides)
  2. Adequate information for both purchasers and producers to make good decisions
  3. absence of externalities
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

How can externalities be defined?

A

when private costs or benefits of an activity differ from the social costs or benefits

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

Elasticity of demand equation

A

Ed= (Q2-Q1)/ (Q1+Q2) / (P2-P1)/(P1+P2)

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

Elasticity of Income equation

A

EI= (Q2-Q1)/ (Q1+Q2) / (I2-I1)/(I1+I2)

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

Normative economic analysis

A

whether a particular mechanism is desirable or not

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

Positive economic analysis

A

based on what has or is happening in the markets

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

When does market failure occur

A

when one or more of the following conditions does not hold

MSC=MPC=P=MPB=MSB

18
Q

What are the three stages of economic evaluation

A

Identifications of costs and consequences
Measurement of c and c
Valuation of c and c

19
Q

Cost Effectiveness analysis

A

measures consequences in natural units in which they occur, does not assign a social value to the consequence as part if the evaluation

20
Q

Incremental cost effectiveness ratio

A

ICER= (Cost A-Cost B) / (Effect A -Effect B)

21
Q

Cost Utility Analysis

A

measures consequences in natural units in which they occur, but outcomes are valued in terms of quality adjusted life years

22
Q

Quality adjusted life years

A

QALY= Sum of (Q x q)

where Q is quantity and q is quality

23
Q

Incremental Cost Utility ratio

A

ICUR= (Cost A-Cost B) / (QUAL A -QALY B)

24
Q

Cost benefit analysis and 2 approaches

A

Values health outcomes in monetary values
Human capital approach, increase in a persons market productivity, measured through wage

Willingness to pay, values a health gain in terms of amount a person is willing to pay to obtain the health gain

25
Q

Contingent valuation

A

hypothetical scenario in which individuals assess a health risk and their willingness to pay to mitigate that risk, or the amount wanting and compared to the increase of risk

26
Q

Net Benefit equation

A

Net Benefit= (benefit A- benefit B) - (cost A - cost B)

27
Q

Present value formula

A

PV = FV/ (1+r)>t

28
Q

NPV formula

A

NPV= Sum of (benefits-costs)/ (1+r)>t

29
Q

Value of life formula

A

VSL= change in cost/ change in risk

30
Q

Shadow pricing

A

sometimes market prices just are not available, like for volunteer hours, so a value is needed , this is called shadow pricing

31
Q

Double counting

A

ex cost of a therapists time for a a consultation when the cost is already the fee

32
Q

Aggregating costs and consequences

A

additional cost and benefits neglects distributional issues regarding who bears the costs and who enjoys the program, may be important to identify beneficiaries to assess desirability

33
Q

What are the 2 ways a change in wages affects optimal level of health?

A
  1. higher wages increases the value of the time spent at work, shifting health capital to the right
    2.higher wages increases the opportunity costs of time spent producing health
    (take medication instead of going for jog)
34
Q

What are the 2 ways education can affect health

A

higher education raises productivity in generating both health and final consumption good
so if E< 1, education and health are negatively corelated
if E>1 education and health are positively corelated

35
Q

What is the difference between, Investment demand for health and Consumption demand for health

A

Investment, an individuals demand for health capital that derives from the monetary benefits associated with improved health

Consumption, the demand for health that derives solely from, the direct utility effects of health

36
Q

What is the demand curve in the Grossman model

A

demand is the marginal monetary benefit of health capital

37
Q

What is health capital

A

investment in a person that are necessary for maintaining health and capacity

38
Q

What is meant by derived demand for health care

A

people do not willingly go for checkups or hospitals, but to maintain their health, they need to go to healthcare centers. Therefore, the demand for healthcare derives from the demand for better health.

39
Q

What is the supply curve in the Grossman and its components

A

S= Marginal cost of health capital= monetary cost + depreciation rate

40
Q

Irrational addiction model

A

no policy can be effective in curtailing smoking short of banning tobacco

41
Q

Rational addiction model

A

-tolerance, reinforcement, withdrawal
-if smokers think that prices are going to go up in the future, they will smoke less now so a single smoke goes further

42
Q

Quasi rational addiction model

A

Individuals take into account future consequences of current decisions but may fail to be fully rational due to,
-inconsistent time preference
-underestimate addictive properties
-misperceive negative effects

Econ 253 (5 decks)

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