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76 Cards in this Set

  • Front
  • Back
Normative Ambiguity
Activism
Pro-Prosperity
MARK 7:7
Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you
(Dr. G - assertiveness training to get out there and get it done)
Normative Ambiguity
Activism
Anti-Prosperity
MARK 5:5
Blessed are the meek: for they shall inherit the earth.
Iron Law of Wages (MARX)
is the same as...
Stationary State Doctrine (Ricardo)
is the same as...
First said that gold is not wealth
David Hume
Quantity Theory of Money
Hume-Fisher Equation
MV=PQ
Who claimed:
Wealth = Goods + Services
David Hume
Invisible Hand Doctrine
Adam Smith
Theory of Absolute Advantage
Adam Smith
Everyone do what you are best at.
What single thing made Adam Smith the Father of Economics?
Water-Diamond Paradox
Utility Theory
Jeremy Bentham
What mistakenly became the rationalization of Imperialism?
Ricardo's "Wage Fund Doctrine"
(Pie chart from board)
Weakness in Deductive Logic
1. Applicability of assumptions
2. The more assumptions the less useful
Weakness in Inductive Logic
1. Fallacy of composition or assuming what's true for the part is true for the whole
What is Normative Ambiguity?
Norm = a standard
Ambi = greek for 2
DEF: 2 Tenets (maxim or principals) of social behavior that suggest counter-directional outcomes when applied arbitrarily to the same set of circumstances.
Where did Dr. G use the word gestalt and what does it mean?
Gestalt = German The whole is greater then the sum of its parts
He used this to describe Macroeconomics
Total Rent = ?
Economic Rent + Quasi Rent

Quasi Rent = premium over E.Rent
Analects
Confucius kept asking questions. The questions were always the same but the answers changed over time.
Comment on Mencius and economic expansion
Mencius discovered that economic expansion needed to happen within by managing the internal budget; NOT EXTERNAL EXPANSION
Who first developed the idea of "division of labor"
Mencius
Syllogism
Aristotle Developed
Set Theory
Internally consistant hypothesis
DEDUCTIVE
NATURAL LAW #1
Hedonism (from Aristotle)
All men seek pleasure and avoid pain; "creature comforts"
Mercantilists
Gold = Wealth
Gold is limited.
Wealth is limited.

DEDUCTIVE LOGIC with fallacy of composition.
Quote Keynes on why money is valuable
Money is not valuable because it is backed by gold, but rather, gold is valuable because it is backed by money.
2 Most Important things about HUME
1. Hume-Fisher Equation
2. Told Smith that GOLD IS NOT WEALTH
NATURAL LAW - SMITH
Employ capital to greatest value; Try to get rich and you will actually help society.
BUILD A BETTER MOUSETRAP
Robinson Crusoe
"and along came Friday"

What happens when you change the number of people in society.
Specialization of labor.
Amazing thought process.
NATURAL LAW - Quesnay et.al.
Wealth ultimatly comes from the soil
Malthus on FOOD and POPULATION
Eventually the rate of increase of food will increase at an arithmatic progression but population will increase at a geometric progression.
Who was the father of cost benefit analysis?
Malthus
Who were John Stuart Mill's mentors?
James Mill
Jeremy Bentham
Who is the Father of Utility Theory?
John Mill

Utility Theory:
Who created the concept of DEMAND?
John Mill
Who was the greatest student of Hegel
Karl Marx
2 bad assumptions by MARX
1. Everything that was going to be invented already was
2. Never made his SYNTHESIS a new THESIS as HEGEL (and Plato) suggest.
Who contributed MARGINAL DISUTILITY?
Carl Menger
Marginal Utility Theory - Name 3 people that contributed to its development
Carl Menger (verbal)
William Jevons (math)
Leon Walras (both)
Who invented the LAW OF SUPPLY AND DEMAND?
Leon Walrus
Who contributed ELASTICITY THEORY?
Alfred Marshall
Consumer Surplus
Utility received but not paid for
Marshall's Profit Theory
Theory of the Firm
How does a company maximize profits
Who came up with INDIFFERENCE CURVES?
Edgeworth
Tells where you want to be on the curve (based on taste - liver and pork bellies)
Who was the greatest student of MARX?
John Maynard Keynes
What theory developed by Keynes offered a solution to the depression?
The General Theory

Keynes claimed that MARX showed him the way
Who was the worlds first demographer?
Malthus
NATURAL LAW - WALRUS
The law of supply and demand
Quotient Rule
if y=u/v

y'=(u'v-uv')/v^2
Marshallian Cross
Partial Equilibrium
y axis = P; x axis = Q
S & D curves meet at Q=QsubE and P=PsubE
Keynesian Cross
General Equilibrium
y axis = C,I,G; x axis = Y
C+I+G and Y curves meet at Y=YsubE
Aggregate Supply and Aggregate Demand
Y & Z respectivly
Cliometrics
use of stasticical observations and mathematical modeling to measure economic causes and consequences
DEMAND
D =
QsubD =
D = f(U)
QsubD = f(P)
SUPPLY
S =
QsubS =
S = f(C)
QsubS = f(P)
Q v. q
Q = entire industry or market

q = a single firm
P is an E
Price is an equilibrium
PsubE conditions
QsubS = QsubD
QsubE or the quantity at equilibrium is known to "clear the market"
Elasticity of Supply
v.
Elasticity of Demand
Responsiveness of consumer to price change
v.
responsiveness of seller to price change
Define TU
Total Utility: Total satisfaction from all units consumed

NOTE: if MU is neg. use TDU (total disutility)
Ax =

where x = C (TC), FC, VC, R
Average x (Ax) = x/q
q = # units produced
Ex. AC = TC/q; AFC = FC/q
PIE = ?
AKA profits
PIE = TR - TC

NOTE: at max when MR=MC
Y =
Y (National Income) = Aggregate Demand

Y = C(consumption) + I(investment) + G(gov. exp.)
C =
C = f(Y)
I =
I = f(r)

r = interest rate
T =
T(gov. receipts) = TsubX(direct/indirect tax) + TsubP(unilateral gov. transfer)
Y =
Y(disposable personal income) = C(consumption) + S(savings)
S =
(for disposable income)
S = f(Y)
&
S = I(investment) + H(hoarding)
APC =
APC(avg. propensity to consume) =

C/Y
APS =
APS(avg. propensity to save) =

S/Y
MPC + MPS =
MPC + MPS = 1
k =
k = 1/MPS
N =
NsubF =
NsubU =
Employment Level
Full Employment
Unemployment
YsubE =
NsubE =
YsubF =
Equil. level of Nat. Income
Eq. level of Employment
Full Employment Income
Wsubm =
W/P =
Wsubm = Absolute or money wages (amts. paid)
W/P = relative or real wages (buying power)
Money Supply =
M = coin + currency + credit money
L =
L(demand for money or liq. pref.) =
Lsubt(trx. demand) + Lsuba(asset demand)
DD =
TD =
DD = Demand Deposit (checking)
TD = Time Deposit (savings)
Marshall Quote on Economic Analysis
"Economics is not a body of concrete truths, but an engine for the discovery of concrete truths"