semestre 4 parcial Flashcards
Is characterized by an elaborate network of tradethat depends on specializationand an intricate division of labor.
modern mixed economy
Make extensive use of money, which provides the yardstick for measuring economic values and is the means of payment.
modern mixed economy
mixed economy is the combination of:
market economy and centralized economy
Mechanismthrough which buyers and sellers interact to determine prices and exchange goods, services, and assets.
market
Thevalueofa Good in termsofmoney; thetermsonwhichdifferentítems can be exchanged
price
problems of economic organization
what ( money votes, profits)
how (minimum costs, technology)
for whom (income, factor services, factor prices)
tastes
technology
Buying, selling, or exchanging, goods and/or services between people or countries
trade
People and countries concentrate their efforts on a particular set oftasks
specialization
Dividing production into a number of small specialized steps or tasks
division of labor
A single buyerorseller CAN affect the price of a good (Monopoliesand Monopsonies)
imperfect competition
(Or spillover effects) Occur when firms or people impose costs or benefits on others outside the marketplace (Pollution; a new drug)
externalities
Commodities which can be enjoyed by everyone and from which no one can be excluded (Street lights)
public goods
the role of the government in modern mixed economy
- they increase efficiency by promoting competition, curbing externalities and providing public goods
- they promote equity by using tax and expenditure programs to redistribute income toward particular groups
Commodities which can be enjoyed by everyone and from which no one can be excluded (Street lights)
economy
To produce the highest combination of quantity and quality of goods and services given the technology and scarce resources.
efficiency
Goodsare limitedrelative todesires
scarcity
Studies the behavior of individual entities such as markets, firms, and households.
micro economics
its concerned with the overall performance of the economy
macroeconomics
fallacy involves the inference of causality. Occurs when we assume that, because one event occurred before another event, the first event caused the second event.
the post hoc fallacy
When you assume that what is true for the part is also true for the whole, you are committing the fallacy of composition.
fallacy of composition
Commodities or services that are used to produce goods and services
inputs
Useful goods or services that are either consumed or employed in further production
outputs
societys technological posibilities
inputs –> production process –> outputs
shows the maximum quantity of goods that can be efficiently produced by an economy, given its technological knowledge and the quantity of available inputs.
the production possibility frontier
the ___ of a decision is the value of the good or service forgone.
opportunity cost
of a decision is the value of the good or service forgone.
Price elasticity of demand or price elasticity
The responsiveness of the quantity supplied of a good to its market price
supply elasticity
perfectly competitive market have:
- market with many buyers and sellers
- trading identical products
- each buyer and seller is a price taker
- firms can freely enter or exit the market
this point comes where revenues just cover variable costs or where losses are equal to fixed costs. When the price falls below average variable costs, the form will maximize profits by ____
shutting down, shutdown rule
prevails in an industry whenever individual sellers can affect the price of their output
imperfect competition
a single producer, product without close substitutes
monopoly
few producers, products can be differentiated or have little to no difference
oligopoly
many producers, many real or perceived differences in product
monopolistic competition
costs and market imperfection
- cost structure and economies of scale
- market size
barriers to entry the sources of market imperfection
- legal restrictions
- high cost of entry
- advertising and product differentiation
the change in revenue generated by an additional unit of sales
marginal revenue
is the study of how societies use scarce
resources to produce valuable goods and services and
distribute them among different individuals.
economics
factors of production
land, labor, capital and entrepreneurship
occurs when an economy cannot produce more of one good without producing less of another good; this implies that the economy is on its production-possibility frontier.
productive efficiency
