rest that is important Flashcards
MRS =
MUx/MUy
If MUa/Pa > MUo/Po then
buy more a
Types of efficiency:
- productive - produce at minimum ATC
- allocative - produce optimal quantity P = MC
When is TR maximized?
When MR = 0
Zero economic profit when
ATC=P
Least cost rule
MPL/Price of L = MPC/Price of C
Auto safety laws have negative effects
Sam Peltzman 1975
The tyranny of the market: Why you cant always get what you want
Joel Waldfogel
Theory of liquidity preference
John Maynard Keynes
First Nobel in economics
1969 Jan Tinbergen and Ragnar Frisch for developing dynamic models
Underinsurance coefficient =
sum insured/ current value. (Sum insured/required% x Asset value) x Loss amount
Basis for insurance payment =
found damage x coefficient
annual interest rate =
(1 + r/n)^n - 1
Taylor rule
monetary policy rule on how central banks should set interest rates tying it to inflation and economic growth
Adam Smith 4 tax principles =
fairness, certainty, convenience, efficiency
Ad Valorem tax
a tax imposed on an item based on its assessed value
3 types of money demand
transactions, precautionary, speculative
The concept of social capital
F. Fukayama
Whistleblower
someone who has and reports insider knowledge
Knut Wicksell
natural interest rate is when economy is in a stable price equilibrium
tax multiplier =
1/MPS - 1, MPC/MPS
remittance
sending money to family abroad
Trade policies do not
affect trade balance
Methodological individualism
Max Weber