Chap 3, 6, 7

Front 1

What are markets?

Back 1

It is the interaction b/w buyers(demander's) and sellers(suppliers)

Front 2

What are the levels of markets?

Back 2

Local- Zeus
National- Big Lots
International- Wal-mart

Front 3

Law of demand?

Back 3

other thing equal, as prices falls, the quantity demanded rises, and as prices rises, the quantity demanded falls

Front 4

What are the reason for law of demand?

Back 4

*common sense
*Law of diminishing marginal utility
*Income effect and substitution effects

Front 5

Law of diminishing marginal utility

Back 5

for the same item bought by the buyer(demander), the less the item pleasures the buyer(damander)

Front 6

Demand?

Back 6

a schedule showing the amounts of a good or service that buyers (or a buyer) wish to purchase at various prices during some time period

Front 7

income effect?

Back 7

something cost more and leave you with less money, so you can buy less

Front 8

substitution effect?

Back 8

the price of another item goes down, you buy that instead of what you usually buy

Front 9

what way does demand curve goes

Back 9

left to right
downward

Front 10

determinants of demand

Back 10

changes in consumer taste, change in number of buyers, change in income, change in price of related goods, change in consumers expectations

Front 11

future prices

Back 11

it may cost more in the future so you buy or it may cost less in the future so you wait

Front 12

future income

Back 12

prompt consumers to change their current spending

Front 13

normal good

Back 13

a good or service whose consumption increases when income increases and falls when income decreases, price remain the same Ex. streaks, furniture, and cars

Front 14

inferior good

Back 14

a good or service whose consumption declines as income rises, prices held constant (when buyers are doing good they don't buy cheap items)

Front 15

Supply?

Back 15

a schedule showing the amounts of a good or service that sellers(or a seller) will offer at various prices during some period.

Front 16

law of supply?

Back 16

other things equal, an increase in the price of a product will increase the quantity of it supplied, and conversely a price decrease

Front 17

which way does the supply curve goes?

Back 17

upward

Front 18

determinants of supply

Back 18

change in resource prices, technology, number of sellers, taxes and subsidies,prices of other goods, producer expectations

Front 19

productive efficiency

Back 19

produces goods in the least costly way

Front 20

allocative efficiency

Back 20

the production of the products most wanted by society(conumer);

Front 21

rationing function of prices

Back 21

the ability of market forces in competitive markets to equalize quantity demanded and quantity supplied and to eliminate shortage and surpluses via changes in prices

Front 22

price floor

Back 22

prices are set above the market price ex. minimum wage

Front 23

price ceiling

Back 23

max legal price seller may charge ex. rent control

Front 24

real GDP

Back 24

correct for price changes

Front 25

nominal GDP

Back 25

the price level at the time of measurement; GDP not adjust for inflation

Front 26

shock

Back 26

unplanned event that effect econ

Front 27

demand shocks

Back 27

something happen that cause ppl not be able to buy

Front 28

supply shock

Back 28

something happen that effect the price or not be there anymo

Front 29

sticky prices

Back 29

slow to go down
ex. consumer wants stability
prices wars
menu prices

Front 30

slick prices

Back 30

prices go up
(fast to go up)

Front 31

saving

Back 31

trade-off current for future consumption

Front 32

investment

Back 32

happen when resources are devoted to increasing future output

Front 33

disposable

Back 33

what is not payed with taxes

Front 34

save

Back 34

deferral of consumption

Front 35

financial investment

Back 35

capture what ordinary ppl mean when they say investment
Ex. stock, bonds, and real estate

Front 36

economic investment

Back 36

relates to the creation and expansion of business enterprises
Ex. new capitol

Front 37

What measures modern economic growth?

Back 37

*standard of living measured by output per person

Front 38

Performance of policy

Back 38

Can the gov't promote economic growth or reduce severity of recession? Is montary of fiscal policy more effective at mitigating recession? Is there a tradeoff b/w inflation and unemployment? uch the gov't get involed?

Front 39

Flexible prices(slick)

Back 39

react within seconds to change in supply and demand?

Front 40

final good

Back 40

ready to be sold 1st time

Front 41

intermediate good

Back 41

products that are purchased for resale or further processing of manufacturing

Front 42

Gross Domestic Product

Back 42

Measure the whole output. Monetary measure or yearly increase. Avoid multiple counts. doesn't count taxes or allowance. Doesn't count 2nd hand sells

Front 43

National Income accounting

Back 43

measure economy's overall performance

Front 44

Bureau of Economic Analysis

Back 44

complies National income and product account

Front 45

C

Back 45

personal consumption expenditures

Front 46

Ig

Back 46

Gross private domestic investment
Ex. machinery equipment,and tools

Front 47

G

Back 47

Gov't Purchased
Ex. guns, tanks

Front 48

Xn

Back 48

Add export good
subtract imported goods

Front 49

Net foreign factor income

Back 49

Americans that work in other country and their income is not added

Front 50

statistical Discrepancy

Back 50

money exchange under the table(not counted)

Front 51

Consumption of fixed capital

Back 51

the amount of capital used up or worn out

Front 52

National income(NI)

Back 52

the total income earned by resource suppliers

Front 53

personal income (PI)

Back 53

the income of suppliers b4 the taxes are taken out

Front 54

Disposable Income (DI)

Back 54

Money able the spend on and save