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ECON 201 > TEST 1 > Flashcards

TEST 1 Flashcards

1
Q

Types of Resources

A

Land. Physical Capital(Man made productions). Labor. Human Capital(Education). Entrepreneurial Ability

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2
Q

Types of Income

A

Wages. Interest. Rent. Profit

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3
Q

Positive Statement

A

Can be tested. Includes facts

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4
Q

Normative Statement

A

What should be (Value Judgments)

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5
Q

Opportunity Cost

A

Is the value of the best alternative given up when any item is chosen

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6
Q

Sunk Cost

A

A cost that has already been incurred. Money already spent

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7
Q

Absolute Advantage

A

Ability to produce a good using fewer resources

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8
Q

Comparative Advantage

A

Ability to produce a good at a lower opportunity cost

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9
Q

Demand:

A

The total amount of a good or service that consumers are willing and able to purchase

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10
Q

Stock Variable

A

Measured at a point in time

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11
Q

Flow Variable

A

Measured over a period of time. Example: Demand

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12
Q

Factors affecting Demand

A

Px, Y, Pop, Ps, Pc, T

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13
Q

Law of increasing opportunity cost

A

To keep increasing the amount of one product, the other product will increasingly go down

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14
Q

Factors affecting demand (Negative or Positive)

A

Px is negative. Y is both. Pop is +. Ps is +. Pc is negative. T is +

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15
Q

The law of demand

A

The negative relationship between Px and Qx

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16
Q

Normal Good

A

Demand that is positively related to income

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17
Q

Inferior Good

A

Demand that is negatively related to income

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18
Q

Change in Demand vs Change in quantity demanded

A

Change in Demand=Shift in curve

Change in quantity demanded=when Px changes

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19
Q

Supply

A

The amount of a good/service that firms wish to sell

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20
Q

Factors affecting Supply

A

Px, Pi, Tech, Sub, Tax

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21
Q

Factors affecting supply (Positive or Negative)

A

Px is +. Pi is neg. Tech is +. Tax is neg. Sub is +

22
Q

Change in Supply vs Change in quantity supplied

A

Change in Supply= Curve shifts

Change in quantity supplied: When Px changes

23
Q

Employed Person

A

Person who spent most of previous week at paid job

24
Q

Unemployed Person

A

Person not employed but looking

25
Q

Labor Force

A

Employed and unemployed

26
Q

Unemployment Rate

A

Percent of labor force unemployed

27
Q

Labor Force Participation Rate

A

% of adult pop that is employed or seeking employment

28
Q

Discouraged Worker

A

Person who would like to work but has given up looking

29
Q

Types of Unemployment

A

Seasonal, Frictional, Structural, Cyclical

30
Q

Seasonal Unemployment

A

Unemployment caused by seasonal changes

31
Q

Frictional Unemployment

A

Unemployment that occurs because it takes time to match up jobs with seekers. Inbetween jobs

32
Q

Structural Unemployment

A

Unemployment that occurs because people dont have skills or live in wrong area

33
Q

Cyclical Unemployment

A

Unemployments that result in movements in the business cycle. Example: Recession

34
Q

Full Employment/Natural Rate of Unemployment

A

Rate with everything but cyclical

35
Q

Underemployment

A

Workers are overqualified for their jobs

36
Q

Underground economy

A

People who dont pay taxes

37
Q

Inflation

A

Increase in average price level

38
Q

Deflation

A

Decrease in average price level

39
Q

Disinflation

A

When there is a positive rate of inflation but it is declining

40
Q

Creeping Inflation

A

Prices are rising slowly

41
Q

Hyperinflation

A

Prices rising dramatically

42
Q

CPI

A

Indicates level of prices for consumer goods

43
Q

GDP deflator

A

Indicates level of prices of all goods

44
Q

PPI

A

Indicates level of prices of goods bought by firms

45
Q

PCE

A

Based on actual consumption patterns

46
Q

Nominal Interest Rate

A

Interest rate usually reported without corrects for inflation

47
Q

Real Interest Rate

A

Interest rate corrected for effects of inflation

48
Q

Economic Fluctuations (Business Cycle)

A

Rise and fall of economic activity around some long term trend

49
Q

4 Basic Stages

A

Expansion, Peak, Recession, Trough

50
Q

Recession

A

When production decreases for two quarters

51
Q

Depression

A

Severe reduction in production longer than a year.

ECON 201 (4 decks)

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