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10 Cards in this Set
- Front
- Back
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What is allocative efficiency |
When only the goods that society wants are produces . P=MC |
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What is productive efficiency ? |
When economy uses all of its resources efficiently . MC=ATC |
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What are spillover costs and benefits? |
Spill over costs and benefits are types of market failure . It's when the costs or the benefits of a given good or service is pushed on to a third party that's neither the producer or the consumer. |
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What are the phases of the business cycle ? |
Peak- where economy is at its best , and there is no cyclical unemployment .
Down turn- when economic activity starts slowing down
Trough/slum- when economic activities reach bottom , cyclical employment is present .
Recovery - when economic activity starts growing again and heading towards another peak.
Recession - two consecutive slum periods. |
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What is GDP? |
GDP is the dollar value of every final product produced by a country in a given year. |
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What is GDP? |
GDP is the dollar value of every final product produced by a country in a given year. |
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What are the main components of GDP? |
C+I+G+Nx C-consumer spendings I - investment G-government spending Nx- net exports( exports- imports ) |
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What is the profit maximizing level for all firms? |
MR=MC |
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What is the profit maximizing level for all firms? |
MR=MC |
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Is the demand curve for a purely competitive firm equal to its average revenue and price? |
Yes . MR=D=AR=P |
