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25 Cards in this Set
- Front
- Back
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Difference Between Macro And Micro Economics
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Macro – refer to the level of economic; big picture
Micro – refer to the structure of economics; business firm, industry |
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Define Ceteris Paribus. Examples.
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“Assume everything remains the Same”
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Law of Demand
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consumers will buy more at low prices
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Define Economics
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Greek word spelled like oikonomos
The branch of social science that deals with the production and distribution and consumption of goods and services and their management. |
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What’s The Central Problem Of Economics?
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Using scarce resources to satisfy society's unlimited wants.
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Adam Smith – Book written in 1776?
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An Inquiry into the nature & causes of Wealth of Nation
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Difference Between Positive And Normative Economics
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Positive – approach to economic involving statement of facts
Normative economics – approach to economic giving interpreted to fact |
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List Of Hazards To Avoid * Fallacy Of Composition*
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- Use of econ. Terminology
- Possible bias in the reporting of econ. Information - The “fallacy of composition” – what true of good for one is good for all - Assuming cause & effect relation when none exist - Amateur or “armchair” econ. views |
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Direct relationship
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two variables move in the same direction (increase/increase)
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Indirect or inverse relationship
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two variables move in the opposite (increase/decrease)
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10. Sectors Of The Economy
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Home, government, businesses, firm
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What Is A Production Possibilities Curve (PPF)?
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a way to show the problem of using scarce resouces to satisfy unlimited wants graphically.
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What Is Opportunity Cost?
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The cost of an alternative given up when following a certain course of action
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13. Over / Underutilization Of Resources
(what happens inside and outside the production possibilities curve? Or not being at full employment/production?) |
Over producting resources – too far
Underutilization resources – to the left |
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15. Economic Resources / Factors Of Production
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How you produce Resource are limited and unlimited
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Unbalanced/Balanced Economic Growth
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Capital increases economic growth more
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What Are The Major Economic Questions?
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a. What To Produce?
b. How To Produce c. For Whom To Produce d. How To Allocate Resources e. How Flexible / Adaptable Is The Society To Change? |
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Assumptions Of Capitalism
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- High reliance of the private ownership of property.
- Lots of freedom of enterprise - Everybody operates in his/her own self-interest - Competition is beneficial to the system - High reliance on free markets to set and adjust prices - Government plays a minimum role |
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Define Law Of Demand
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price and quantity demanded are indirectly related
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Define Law Of Supply
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the higher the price, the higher the quantity supplied
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27. Effects Of Government Interventions On Equilibrium
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Price floor and the price ceiling
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28. Types Of Government Intervention – Price Floors (surplus), Price Ceilings (shortage)
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a. Price Floors (Supports) apartment
b. Agricultural Support (wheat example) c. Minimum Wage Law |
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Minimum Wage Law – Traditional Vs. New Analysis
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Tradition Analysis says that the minimum wage is above market equilibrium (surplus of unemployment)
New analysis – below equilibrium in new jersey |
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Mini - Business Cycles – Where Are We Now?
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High Unemployment, recession, peak, tough
Goal is to even it out |
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What Is The Total Revenue Rule?
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Compute total revenue as P * Q then are
- If p & TR opposite its elastic - Are the same its inelastic - Have on change its unitary |
