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26 Cards in this Set
- Front
- Back
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T or F. The origin is where the graph starts. |
F. The origin is where the horizontal and vertical axes start. |
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T or F. A graph showing a positive relationship between stock prices and production means that an increase in stock prices causes an increase in production. |
F. The graph shows a correlation between stock prices and production, but that does not necessarily mean that an increase in stock prices causes the increase in production. |
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What is economics |
The study of how people make choices about the ways to satisfy their wants and needs with limited resources. |
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Why is Scarcity inescapable? |
Resources are limited and human choices are insatiable. |
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Trade-offs |
The OPPORTUNITY cost of what we choose is what we must GIVE UP by making that choice. |
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Pareto efficiency |
The only way anyone can be made better off is by REDUCING the well-being of one or more people. |
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Demand curve and Supply curve |
Demand Curve: quantity...Buyers are willing to buy (-) Supply Curve: quantity...Producers are willing to supply (+) |
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Monopoly |
A single supplier market |
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Monopoly |
A single supplier market |
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Oligopoly |
A small number of suppliers market |
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Monopoly |
A single supplier market |
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Oligopoly |
A small number of suppliers market |
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Monopolistic competition |
Many suppliers of differentiated products |
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Why does Imperfect Competition arise? |
Because of barriers to entry into market |
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How does a market fail? |
When externalities or breakdowns in the system of private property cause market outcomes to deviate from the socially efficient outcome |
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How do externalities occur? |
When there are important economic interactions that DO NOT take place through markets. |
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Goods and services classification |
1) rivalry 2)excludability
•PPCC• |
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Fun Fact |
Since 1900, US population has increased by a factor of FOUR, GDP by a factor of 32 |
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Fun Fact |
Since 1900, US population has increased by a factor of FOUR, GDP by a factor of 32 |
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Business-cygle |
Alternations of periods of EXPANSION and RECESSION |
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Fun Fact |
Since 1900, US population has increased by a factor of FOUR, GDP by a factor of 32 |
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Business-cygle |
Alternations of periods of EXPANSION and RECESSION |
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Economists break down unemployment into... |
•FCS• Frictional, Structural, Cyclical |
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Potential Output |
Quantity of goods and services that WOULD be produced if ALL resources were fully employed |
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Potential Output |
Quantity of goods and services that WOULD be produced if ALL resources were fully employed |
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Output Gap |
Difference between actual output and potential output |
