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54 Cards in this Set
- Front
- Back
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Macroeconomics |
Higher aggregated markets Labor forces Consumer products Economy |
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Microeconomics |
Narrow units of economy Firms Households |
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Change in P |
Leads to Change in Q |
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Supply vs. QS |
Infinite QS in Supply curve |
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Demand vs QD |
Infinite QD in Demand |
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Adam Smith |
Father of Econ; Authored the wealth of nations in 1776 kand coined the invisible hand |
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Resources |
Input used to create goods Land, Labor, tools |
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Objective |
$1 = 1$ |
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Subjective |
"A dollar in quarters is better than a dollar bill" |
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Competion |
The great market regulator |
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Scarcity |
Something not freely avaible in nature as everyone would want |
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Rationing |
Allocating a limited supply of resources or goods usually by market prices |
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Midlemen |
Lower transation cost; arrange and facilitate trades |
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Positive Economics |
"WHAT Is" |
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Normative Economics |
"What ought to be' |
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InPoRTEN |
Income Prices of Related Goods Taste Expectation Number of consumers |
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Types of related goods |
Substitutes and Compliments |
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Types of Goods |
Normal and inferior |
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Equilibrium |
QD = QS |
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Market clearing price |
Equilibrium |
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Surplus |
Amount of good available is more than demanded |
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Shortage |
Amount of good supplied is less than demanded |
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Opportunity Cost |
Highest valued alternative that must be sacrificied to make a decision |
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Production Possibility Curve |
Snap shot in time of production posibilities given a set amount of resources |
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Comparative Advantage |
Production of a good at the lowest opportunity cost |
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Absolute Advantage |
Most efficient Production of a good |
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Capitalism |
Economic system where resources privately owned and allocated though free market prices |
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Elasticity |
Responsiveness to change in prices |
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Substitute: |
Goods that could be interchangable |
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Compliments |
Goods that go together |
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Consumer Surplus |
Amount one is willing to pay minus what they have to pay |
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Producer Surplus |
Amounth seller IS paid minus a sellers Economic cost |
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Total Surplus |
Producer and Consumer surplus |
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Price Ceilings |
Max Price allowed to be paid by law |
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Price Floor |
Minimum someone is allowed to pay for a good by law |
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Externalities |
Positive or Negative unintended consequences of an act which were not taken into account |
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Transaction Costs |
Costs of arranging agreements between buyers and sellers |
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Balance Sheet: |
Assets = Liabilities + Owners Equity |
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Income Statement |
AKA Profit and Loss Statement |
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Economic Profit |
Total revenue minus Economic Cost |
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Economic Costs |
Implicit and Explicit cost of operations |
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Implicit: |
Opportunity costs |
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Explicit |
Monetary costs of opperating |
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Ceteris Paribus |
"All things held constant" |
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Post Hoc Ergo Propter Hoc |
Follows, Therefore, because of |
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Deadweight Loss |
Transactions' total surplus amount not realized due to a tax |
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Economizing |
Getting the most benefit for the least cost |
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Fallacy Of Composition |
Whats true for individual is not always true for the entire group |
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Free Rider |
Person who receives benefits from goods they didnt pay for |
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Laffer Curve |
Illustrates relationship between tax rates and tax revenues |
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Market Failure |
Society isnt producing an efficient quantity of good |
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Rational ignorance |
Restraining self from knowing something if costs for knowing outweigh beneits |
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Tax Incidence |
The way burden of govt tax is distributed among economic units |
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Utility |
Subjective benefit a person expects from a choice |
