Econ 101 Final

Front 1

island economies

Back 1

self production
no trade/exchange
no money/common measure of prices
consumption limited to capacity
tribal people/ isolation

Front 2

centrally planned economies

Back 2

production is designated by authority
none or little private ownership
exists in china, south america, military and universities

Front 3

market economies

Back 3

private ownership of assets
mutually agreeable exchange
double coincidence of wants-
(consumption limited to extent in which you can exchange resources)

Front 4

efficiency

Back 4

economic system that describes how effectively it directs resources toward production and consumption

Front 5

production efficiency

Back 5

least amount of resources to e used to manufacture products and services

Front 6

consumption efficiency

Back 6

given the same cost, individuals consume their preferred good

Front 7

allocative (distribution) efficiency

Back 7

when there's pricing power, it leads to allocative efficiency. the people who need it and are willing to pay for it cant get it

Front 8

innovative efficiency

Back 8

coming up with new things for people to consume

Front 9

horizontal equity

Back 9

everyone pays the same price

Front 10

vertical equity

Back 10

different prices are charged based on who is will ing to pay more

Front 11

equity of welfare

Back 11

no matter our age, we all pay taxes for government welfare

Front 12

equity of resources

Back 12

everyone consumes equal resources

Front 13

equity of opportunity

Back 13

everyone has the same opportinities

Front 14

Lemmons Model

Back 14

buyers dont always have perfect information about the quality good they want to purchase
(used cars, homes, produce, medical procedures)

Front 15

adverse selection

Back 15

when the highest quality producers or services are NOT available for sale because of invariable info in the market place

Front 16

moral hazard

Back 16

disincentive for someone whose behavior is not perfectly observed/verified to provide the truth (act responsibly)

Front 17

noisy signals

Back 17

look out for educated idiots
(loud people who speak with authority but have no validity)

Front 18

irrelevant signals

Back 18

doctors maintain the friendly reputation(but are they up to date with the newest procedures?)

Front 19

unethical use of signals

Back 19

checking credit scores/personal life/ checking prior medical history for insurance companies

Front 20

consumption spillover

Back 20

flu shot- when you get one, it helps others you surround yourself with.
(private incentives are not as large as the total public incentives)

Front 21

US Tort system & Malpractice Insurance

Back 21

doctors favor old/safe procedures and meds vs. new and possibly better procedures because they fear the side effects

Front 22

fee for service

Back 22

insurance providers limit # of visits or $ amount paid for "types" services regardless of patient needs

Front 23

huge research and development criteria

Back 23

providing health care, testing meds, treatments requires time and capital (test subjects)
new procedures have long term consequences

Front 24

Government Regulation

Back 24

occasionally the government mandates the provision of care and controls FDA (mandates swine flu & anthrax vaccines)

Front 25

shortages of health care providers

Back 25

hospitals are expensive
not enough nurses/too many nursing students (lack of qualified teachers?)

Front 26

uncertainty of healthcare outcome

Back 26

health care is always costly and the best health care doesn't always mean the best health

Front 27

third party payments/tying/bundling

Back 27

you might end up paying for something you dont need. vision insurance in your healthcare-even if you have 20/20

Front 28

pricing power

Back 28

limit competition
and then there is no need to offer a more competetive price

Front 29

determinants of elasticity of demand

Back 29

# of subsitutes
% of income
time period of consumption
generality of category

Front 30

3rd degree price discrimination

Back 30

charging a different price to different groups of people
most common type

Front 31

purposes of money

Back 31

medium of exchange
avoids transaction costs of barter system
solves th eproblem of "double coincidence of wants"

Front 32

store of value

Back 32

problem with barter system is that some products/goods go bad/wilt/die

Front 33

unit of account

Back 33

most everybody understands the unit of a dollar in a transaction, everything is priced in the unit of dollars( instead of ipods, oil barrels...)

Front 34

divisibility

Back 34

we have bills, coins, all in different amounts. goods used in barter cannot be divided

Front 35

verifiability

Back 35

we use dollars because no matter what, they will always be equal to eachother. Fiat money- us gov. verifies each coin and bill has a specific worth

Front 36

fungibility

Back 36

a dollar is a dollar is a dollar
other goods dont equal eachother

Front 37

MO monies

Back 37

narrow money
notes and coins that are minted/printed

Front 38

M1 monies

Back 38

notes held by central/commercial banks
checking account deposits
thraveler's checks
share draft accounts (savings accounts)
debit cards

Front 39

M2 monies

Back 39

M1 money
savings deposits
small certificates of deposits
money market deposits

Front 40

M3 monies

Back 40

large deposit accounts
long term deposit accounts
repurchase agreements

Front 41

roles of the Fed

Back 41

holds govt accounts
clears checks written by us treasury (tax returns)
processes soc security checks/fed employee paychecks
redeems savings bonds and food stamps
use fed accounts to pay banks and individuals

Front 42

roles of the fed

Back 42

back to the US govt
financial regulator
clearing house
lender of last resort
monetary policy

Front 43

property rights and capital

Back 43

fixing assets
integration of information
providing accountability
making assets fungible
networking
protecting transactions

Front 44

causes of the US financial crisis 08/09

Back 44

housing bubbles
credit rating agencies (securitization and consulting agencies)
conduits
derivatives

Front 45

causes of differences in wages

Back 45

levels of skill/effort
employment in different industries
employment in different types of companies
tenure of duration
unionization rates

Front 46

you aren't unemployed if

Back 46

you have
stopped searching
entered a training program to acquire/update skills
intitutionalized (prison, home, military)
under 16

Front 47

structural unemployment

Back 47

there are enough jobs, but not enough qualified employees to choose from

Front 48

cyclical unemployment

Back 48

there are enough members of the work force, but there arent enough firms with open positions. they are not willing to expand in order to make those openings.

Front 49

frictional unemployment

Back 49

when workers turn down jobs in anticipation of better offers later, or are in transition between jobs (voluntary)