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69 Cards in this Set

  • Front
  • Back
Labor Productivity
The Amount of output that can be obtained per hour of labor
Human wants
Things, services, goods, and circumstances people desire
Resources
Things or services used to produce goods, which then can be used to satisfy wants
Economic resources
They are scarce
Free Resources
Air, etc. They are so abundant that they can be obtained without charge
Economic Resource #1
Land, natural resources, minerals, plots of groun
Economic Resource #2
Labor - HUman efforts, both physical and mental
Economic Resource #3
Capital - Buildings, equipment, inventories and other nonuman producible resources that contribute to the production, marketing and distribution of goods and services
Fun Fact...just remember
Economics is concerned with the way resources are allocated among alternative uses to satisfy human wants
Technology
Is society's pool of knowledge concerning the industrial arts.
4 Questions of economists!
What determines what and how much is produced?
What determines how it is produced?
What determines how the society's output is distributed among the members?
What determines the rate at which the society's per-capita income will grow?
Opportunity Cost
The value of what these resources could have produced had they been used in the best alternative way
Positive Economics
Contains descriptive statements, propositions and predictions about teh world - Not judgmental!
Normative Economics
Makes statements about what ought to be or what a person, organization, or nation ought to do
4 Tasks of an economic System
1.) Determine the level and composition of society's output
2.) Determine how each good and service is to be produced
3.) Determine how the goods and services are to be distributed among the members of society
Labor Productivity
The Amount of output that can be obtained per hour of labor
Human wants
Things, services, goods, and circumstances people desire
Resources
Things or services used to produce goods, which then can be used to satisfy wants
Economic resources
They are scarce
Free Resources
Air, etc. They are so abundant that they can be obtained without charge
Economic Resource #1
Land, natural resources, minerals, plots of groun
Economic Resource #2
Labor - HUman efforts, both physical and mental
Economic Resource #3
Capital - Buildings, equipment, inventories and other nonuman producible resources that contribute to the production, marketing and distribution of goods and services
Fun Fact...just remember
Economics is concerned with the way resources are allocated among alternative uses to satisfy human wants
Technology
Is society's pool of knowledge concerning the industrial arts.
4 Questions of economists!
What determines what and how much is produced?
What determines how it is produced?
What determines how the society's output is distributed among the members?
What determines the rate at which the society's per-capita income will grow?
Opportunity Cost
The value of what these resources could have produced had they been used in the best alternative way
Positive Economics
Contains descriptive statements, propositions and predictions about teh world - Not judgmental!
Normative Economics
Makes statements about what ought to be or what a person, organization, or nation ought to do
4 Tasks of an economic System
1.) Determine the level and composition of society's output
2.) Determine how each good and service is to be produced
3.) Determine how the goods and services are to be distributed among the members of society
4.) Determine the rate of growth of per capita income
Production Possibility Curve
Curve that shows the various combinations of output of two variables that a society can produce
capital Goods
Consist of plan and equipment used to make other goods
Consumer goods
Items that consumers purchase, like clothing, food and drinks
Consumers
Purchase the goods and services that are the end products of the economic system
Firm
Organization that produces a good or service for sale - want profit
Market
A group of firms and individuals in touch with each other to buy or sell some good good
Grosss Domestic Product
Value of the toal amoutn of final goods and services produced by our economy during a particular period of time
GDP can be measured
as the sum of all the money incom earned in a given period of time, or as the sum of all expendiatures in the economy
Final goods and services
goods and services destined for the ultimate user
Base Year
The cost of a certain good in one year is held constant and used at the same price for furture year's calculations
Current Dollars
Actual dollar amounts
Constant dollars
corrected for changes in the price level
Real GDP
GDP after being corrected for changes in the price level
Price index
The ratio of the value of a set of goods and and services in constant dollars
Value added
The amount of added added by a firm or industy to the total worth of the product
Leisure does
Not show up in GDP
Expenditures approach
Regards GDP as the sum of all the expenditures on the final goods and seriveces produced this year
income approach
regards GDP as the sum of all the incomes derived from the production of this year's total output
Net exports
Equal the amount spent by other countries on our goods and services less the amount we spent on other countries goods and services
Expendtiure approach to GDP =
Personal consumption expenditures + Gross private domestic investments + governemnt purchases of goods and serives + net exports
Income approach GDP =
Compenstation of employees + rents + interst + propritor's income + corpoate profits + depreciation + indirect business taxes
Trough
POint where national output is lowest relative to its petential level
Expansion
Subsequent phase during which national output rises
Peak
Nation output is highest relative to it's potential level
Recession
Subsequent phase during which national output falls
Depression
A period when national output is well below its potential level
Prosperity
A period when national output is close to its potential level
Aggregate demand curve
SHows the level of real national putput that demanded at each price level
Demand curve
Slopes downward and to the right
Why does the damand curve slope down and to the right?
Increaes in the prive level push up interest rates and increases in interest rates reduce total output
Aggregate supply curve
Shows the level of real national output supplied at each prive level
Short-run aggregate supple
Slopes upward and to the right - when other things are held equal the higher is the prive level, the large the total output supplied.
According to many economists the short-run aggregate supple curve
tends to be close to horizontal at relatively low levels of output and gets steeper and steeper as output increases
Frictional unemployment
Occurs because people quit jobs, because ex-students are looking for their first job, or because of seasonal workers
Structural unemployment
Occurs when new goods and new technologies call for different skills than old ones and workers with older skills cannot find jobs
Cyclical unemployment
Occurs because of business fluctuations
POtential GDP
Is the level of gross domestic product that could be achieved with full employment
Full employment
5 percent unemployment rates
Long-run aggregate supple curve
A verticle line